Tool Shed depreciation life?

[BulldogTom]

Taxpayer had a tool shed built for his construction business.   Pretty big, but not the size of a garage, more like the size of a shipping container.   100% business use.   I am trying to set it up in fixed assets and I don't know what the life is.   My first reaction was 39 year commercial.   But that seems silly for a 10K building, but it may be correct.   I see 20 year and 15 year options, but I am not sure that is correct.   Any help appreciated.

Tom
Longview, TX

[schirallicpa]

right - no foundation.  Probably a slab with tin on stringers. - I will take 15 years on these.  It's certainly not a commercial building.

[Lee B]

If it's not on a permanent foundation then I would use a 7 year life.

That is what I use for Concession Stands and Food Kiosks. and they cost way more than $10,000.

[DANRVAN]

On 4/18/2023 at 8:59 AM, BulldogTom said:

Taxpayer had a tool shed built for his construction business.   Pretty big

It is either classified as nonresidential real property (most likely); or falls under "Asset Class 15.0" which includes assets used in the construction industry with a 5 year depreciation life.

 

Asset Class 15.0 would be a sure thing if the shed was portable and moved from job site to job site.  Otherwise it could be argued that the structure is attached to the land by it own weight and for an indefinite time period.

 

On 4/18/2023 at 8:59 AM, BulldogTom said:

 I see 20 year and 15 year options,

 

15 year life would fall under Asset Class 00.3; Land Improvements which are also permanently attached to the land.  The shed does not qualify as an improvement since it is a building with walls and a roof.

 

A 20 year life is not appropriate under Asset Class 01.3; Farm Buildings.  

On 4/18/2023 at 8:18 PM, cbslee said:

a 7 year life.

That is what I use for Concession Stands and Food Kiosks

 

 

In that case I would use 5 year life under Asset Class 57.0 for assets used in "Distributive Trades and Services".

[BLACK BART]

The above posts are what I like about this board.  Nobody can say it doesn't help you cut taxes and look good to customers; i.e., first post starts out with possible 39 years and last post ends up at five.  As they say, it's all good! 

[Sara EA]

I think the 5-year comment was meant to apply to concession stands.  Being on a slab foundation has nothing to do with the structure's permanency.  A lot of homes are built on slabs with no basement.  The key is whether the structure is permanent or can it be moved around.  If permanent = 39 years.  (Well, I do have a client who moves houses, e.g., to higher ground after a hurricane, but that's an ordeal because houses aren't meant to be moved.)

[DANRVAN]

3 hours ago, Sara EA said:

5-year comment was meant to apply to concession stands. 

correct

 

11 hours ago, BLACK BART said:

first post starts out with possible 39 years

And most likely is 39 year property unless it can be proven otherwise per reg 1.856-10 (d):

(2) Inherently permanent structure -

(i) In general. The term inherently permanent structure means any permanently affixed building or other permanently affixed structure. Affixation may be to land or to another inherently permanent structure and may be by weight alone. If the affixation is reasonably expected to last indefinitely based on all the facts and circumstances, the affixation is considered permanent.