Parking Lot Sealcoating Depreciation

I added a 15 000 parking lot late last year sept.

Parking lot sealcoating depreciation.

We touched on depreciation of asphalt sealcoating equipment in our smart ways to save money in your asphalt business this season article but did not go into detail. This depends on how you classify the nature of the new paving. A business owner can take a depreciation off his taxes for a paved driveway he put in to improve his facilities. Because of this the taxation of recaptured depreciation as ordinary income is increasingly rare.

Slower oxidation sealcoating fills surface voids which reduces exposure to oxygen and uv rays and reduces the depth to which oil or gas can penetrate the pavement. Grade level surface parking area usually constructed of asphalt brick concrete stone or similar material. How is a parking lot classified. The answer is it depends.

Section 1245 or section 1250. Please note that the tax court has recently ruled in favor of taxpayers that elect to expense cyclical. Accordingly the issue is whether these parking structures are buildings or land improvements for depreciation purposes. Can a parking lot depreciation be deducted on taxes.

Now that the differences between sections 1245 and 1250 have been established where does a parking lot fall. Parking lot sealcoating helps to project a positive image of the company facility or residential complex. It s important to give you an idea of exactly what the tax benefit is in simple non accountant words. If the lot was partially paved and only parts need to be replaced then you likely have sufficient basis to treat it as an expense.

Category includes bumper blocks curb cuts curb work striping landscape islands perimeter fences and sidewalks. I added a land improvement asset and tt calculated 750 for my expense yes i am still doing my 2015 taxes. Depreciation on asphalt sealcoating equipment. 00 3 land improvements 15 years.

Section 1250 affects very few assets today. See attachment for asset summary. Taxpayer asserts that the parking structures are land improvements with a 15 year recovery period and 150 declining balance method of depreciation under gds while the irs asserts that the parking structures are buildings. The internal revenue service provides a thorough guideline for determining the amount of appreciation and by following its rules the process becomes a matter of plugging the correct information into the correct form.