Hey there,

Accountant is out of town for a couple of weeks and I'm trying to reconcile some statements...

I own a couple of resorts and we just bought one of those sheds from Home Depot... $5k+. Paid cash. Anyone know, with confidence, how I'd account for that? Really dont want to depreciate it, but may have to?

If I can simply expense it, would this be a gounds improvement or a grounds maintenance expense?

I can definitely change it in a couple of weeks, just wondering if anyone had any advice... yes I'll get the official word from the accountant when he gets back.

Thx!

I know its a small amount, but why wouldn't you want to take advantage of depreciation on an asset? Unless you plan on selling down the road where it would need to be paid back, isn't depreciation one of the benefits of owning assets from the tax code?

Yeah good point. I guess since we'll just sell it with the sale of the property at some point, it's probably better to depreciate?? Just doesn't seem big enough for the hassle. May just want the $5k+ expense against the bottom line...

Our capitalization threshold is $2500 but that is an internal decision and we're targeting EBITDA. Higher threshold means less record keeping in addition to other considerations.

For $5k cash, I doubt anyone would notice one way or the other.

Is this for bookkeeping or tax purposes? How long do you plan to own/use the shed? What's kept in it? How big is your total asset amount? You're Wal-mart, that's an immediate expense all day, every day. You're a tiny Mom & Pop operation with $20,000 in assets, that's probably a capital item and should be depreciated.

Resorts = AIR BnB's at the beach?

What are you top three nuggets of good advice?

Thank you.

mwp02ag said:

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I know its a small amount, but why wouldn't you want to take advantage of depreciation on an asset? Unless you plan on selling down the road where it would need to be paid back, isn't depreciation one of the benefits of owning assets from the tax code?

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Wouldn't expensing it just be like depreciating it 100% in the first year? Why wouldn't you want to do that if you could?

Aggiemike96 said:

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Is this for bookkeeping or tax purposes? How long do you plan to own/use the shed? What's kept in it? How big is your total asset amount? You're Wal-mart, that's an immediate expense all day, every day. You're a tiny Mom & Pop operation with $20,000 in assets, that's probably a capital item and should be depreciated.

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Just a storage shed for lawn equipment. Assets are +/-$10M. I actually found an article that was pretty close to the situation and just put it under "Improvements" and flagged it for my accountant to review...

TxTarpon said:

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Resorts = AIR BnB's at the beach?

What are you top three nuggets of good advice?

Thank you.

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Man, I wish! A couple of cabin resorts in Estes Park, Colorado. Only advice... keep it simple, keep it clean, and know your value.