L.S. Posted February 12, 2009 Report Share Posted February 12, 2009 Have a farmer who lives on his home place but bought another 40 acres with a house in 2008. I am setting up a Sch E for the house as they are renting it out. House is valued at $80,000. In 2008 they put in new windows for $5,000 - paid labor for putting in the windows of $992, repaired roof for $4,000 and paid $3200 for labor for the roof. They also put up a pole barn on the new 40 acres that the farmer is using for his equipment to be stored - I am going to depreciate that on his Sch F. My question is on the labor for the windows and roof - does this get added in the cost of the windows and roof and depreciated or can it be shown on the Sch E as labor? Thanks. Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted February 12, 2009 Report Share Posted February 12, 2009 Yes, in this set of facts, I would suggest that the labor is to be added to the cost of the improvements. All costs related to or associated with improvement are to capitalized. Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 12, 2009 Report Share Posted February 12, 2009 Have a farmer who lives on his home place but bought another 40 acres with a house in 2008. I am setting up a Sch E for the house as they are renting it out. House is valued at $80,000. In 2008 they put in new windows for $5,000 - paid labor for putting in the windows of $992, repaired roof for $4,000 and paid $3200 for labor for the roof. They also put up a pole barn on the new 40 acres that the farmer is using for his equipment to be stored - I am going to depreciate that on his Sch F. My question is on the labor for the windows and roof - does this get added in the cost of the windows and roof and depreciated or can it be shown on the Sch E as labor? Thanks. I'd consider it part of the overall cost for the windows and roof. Just like shipping and installation of machinery is part of the cost basis of the machine. It's not like you can buy windows and POOF! they magically install themselves. (That might be nice, though, especially if you could then be sure the installation was done properly.) Catherine Quote Link to comment Share on other sites More sharing options...
jainen Posted February 12, 2009 Report Share Posted February 12, 2009 >>POOF! they magically install... be sure the installation was done properly<< It's so hard to find a reliable genie these days. Quote Link to comment Share on other sites More sharing options...
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