Finance

Have finance questions? Ask a financial expert online.

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

When can I record an asset? Start depreciation? I'm in a…

When can I record...

When can I record an asset? Start depreciation? I'm in a partnership, started March 2017. We were gifted a house last year (around November/December) and immediately started paying vendors to get the house ready for rental. We replaced the HVAC heat pump, got water connections, paid for cleaning, etc. However, the deed was not recorded until Feb of this year. When can we record the asset on our books? Can we expense the items that we already spent money on last year?

Show More
Show Less
Ask Your Own Finance Question
Customer reply replied 4 months ago
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer reply replied 4 months ago
Let me know if you need more information, or send me the service offer(s) so we can proceed.
Answered in 4 hours by:
3/14/2018
TaxRobin
TaxRobin, Senior Advisor
Category: Finance
Satisfied Customers: 18,220
Experience: 15 years of experience in financial advising with emphasis on tax issues.
Verified

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Ask Your Own Finance Question

The asset is recorded when the partnership received it, Feb by ownership transfer.

The costs to rehab are added to the basis of the property. Depreciation of asset is not started until it is available for rental use. You may not expense costs to rehab. Those are all added to the basis and will increase value for depreciation purposes.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

Ask Your Own Finance Question
Customer reply replied 4 months ago
OK. What about the other ancillary costs like painting, cleaning fees? I understand that I'll need to capitalize the HVAC repair and water connection, but what about other costs that don't extend the life of the property? Can I not deduct those as incurred?

You add that to the cost of the property too. You cannot claim any expenses until the property is available for rent.

Ask Your Own Finance Question
Customer reply replied 4 months ago
Further, without me booking those expenses, it makes my cash on hand appear higher than it should me at year end. So, my balance sheet is off by the amount of the HVAC repair and water connection.

You can book them you just cannot claim them for expenses against tax until the property is available for rent.

Ask Your Own Finance Question
Customer reply replied 4 months ago
Thanks, ***** ***** to confirm, although it was ready for rental use in January, we cannot claim any deductions until Feb, the month of the deed transfer?

If it was ready and you advertised and a tenant could have moved in then you can start in Jan.

You can run the full year for depreciation. As long as the contract was signed and all was in the partnership that would be fine.

Ask Your Own Finance Question
Customer reply replied 4 months ago
Got it. We did not advertise in like a bulletin or anything, but a family friend lives there. The lease was signed for March because we gave them an abatement for Feb rent. Does that matter at all? The lease is dated Jan 13th, but the rental period starts March 1st.

My judgement would be if the lease was signed in Jan and you could not lease to anyone else after the signing then go with Jan.

TaxRobin
TaxRobin, Senior Advisor
Category: Finance
Satisfied Customers: 18,220
Experience: 15 years of experience in financial advising with emphasis on tax issues.
Verified
TaxRobin and 87 other Finance Specialists are ready to help you
Ask your own question now
Customer reply replied 4 months ago
OK...Thanks for your help!
Customer reply replied 4 months ago
Can you provide any IRS guidance surrounding the capitalization of rehab costs? Like an IRS publication, regulation, of some sort?
Ask Your Own Finance Question
Basis of Assetshttps://www.irs.gov/pub/irs-pdf/p551.pdf
Ask Your Own Finance Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a financial professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask TaxRobin Your Own Question
TaxRobin
TaxRobin
TaxRobin, Senior Advisor
Category: Finance
Satisfied Customers: 18,220
18,220 Satisfied Customers
Experience: 15 years of experience in financial advising with emphasis on tax issues.

TaxRobin is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,609 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,222 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,933 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
I have just been given the financials of a business that is
Hi, I have just been given the financials of a business that is for sale. in the meeting the vendor mentioned only selling the inventory as the business financials were not substantial enough to sell … read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
In Michigan, we have a company that does residential
In Michigan, we have a company that does residential Basement Waterproofing and other related services. Are we ever supposed to charge a tax to the customer or collect taxes in any way to give back to… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I'm going to build a residential house to use as my
I'm going to build a residential house to use as my photography studio. It's residential zone can I write it off? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
New law for repair, maintennance and installation sales tax
New law for repair, maintennance and installation sales tax take in effect 1/1/207 for contractors. Im reading all these exemptions and want to know if capital improvements and new construction is exe… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,450 satisfied customers
This question is ... We like your opinion....On June 6th we
This question is for Lane... We like your opinion....On June 6th we called an Appliance Company to repair our washing machine which was not draining...the invoice diagnosis was "Spider Broke & falling… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
The post-closing trial balance Auto Parts 31, 20x4 is given
The post-closing trial balance for Garza Auto Parts for December 31, 20x4 is given below: Garza Auto Parts Post-Closing Trial Balance Dec 31, 20x4 Debit Credit Cash $11,520 Accounts Receivable 3,820 A… read more
Manal Elkhoshkhany
Manal Elkhoshkhany
Tutor
1,933 satisfied customers
IRS Form 3115 question - Hello, I have been renting out
IRS Form 3115 question - Hello, I have been renting out a residential single-family house in 2009. I have taken depreciation on the 27.5 year schedule since 2009 each year, using (Fair market value - … read more
Rakhi Vasavada
Rakhi Vasavada
Financial and Legal Consultant
Bachelor's Degree
2,609 satisfied customers
Create a new company in Quickbooks or excel for [your name:
Create a new company in Quickbooks or excel for [your name: Yasemin] Enter transactions in Quickbooks to reflect activities in the first quarter of 2012: - Jan 2: Delivered analysis of three manuscrip… read more
Sun Valley CPA
Sun Valley CPA
Bachelor's Degree
14 satisfied customers
We own some land and have trying to sell it for 4 years and
We own some land and have trying to sell it for 4 years and no luck with real estate the way it is. We have about 2000 between us a month and this does not cover house, utililities and other monthly e… read more
TaxTom
TaxTom
Accountant
Bachelor's Degree
14 satisfied customers
Hello, Would you be able to assist me with a project that focuses
Hello, Would you be able to assist me with a project that focuses on cash flow analysis? In a 3 page paper, address the flowing areas: • Identify the components needed in cash flow statements. • Expla… read more
datalog
datalog
Vice President
Bachelor\u0027s Degree
81 satisfied customers
-44 Cash Budgeting for a Hospital Highline Hospital provides
-44 Cash Budgeting for a Hospital Highline Hospital provides Customer Question Ask your own question now > 7-44 Cash Budgeting for a Hospital Highline Hospital provides a wide range of health servi… read more
Neo
Neo
Bachelor\u0027s Degree
1,144 satisfied customers
A $20 bonus will be added for your help or what you think is
A $20 bonus will be added for your help or what you think is fair. This project will focus on the financial aspects of your start up business (Carpet Cleaning Business). In a 1 to 2 page paper and acc… read more
datalog
datalog
Vice President
Bachelor\u0027s Degree
81 satisfied customers
Do you offer virtual CPA services such as financial complilations A
Do you offer virtual CPA services such as financial complilations? A friend of mine has commercial cleaning contracts with a major city in colorado. This year they now want financial statements signed… read more
Rakhi Vasavada
Rakhi Vasavada
Financial and Legal Consultant
Bachelor's Degree
2,609 satisfied customers
Note I will pay a bonus. My dad built a $5 million house over
Note: I will pay a bonus. My dad built a $5 million house over a 10 year period. He sold it in 2010 and thinks he made about $75K. But he is assuming he can deduct pretty much everything he put in. Si… read more
TaxTom
TaxTom
Accountant
Bachelor's Degree
14 satisfied customers
Using Accrual-Base accounting as described in the lecture,
Using Accrual-Base accounting as described in the lecture, answer the following: a. Your company manufactures specialty items. In order to reduce any loss from a customer canceling an order after prod… read more
ConceptsCoach
ConceptsCoach
Master's Degree
266 satisfied customers
We have Quickbooks 2007 for our IT Consulting Business. We
We have Quickbooks 2007 for our IT Consulting Business. We use QB to manage all of our accounting. Recently, I just started taking over all of our accounting because our bookkeeper left. Our A/P porti… read more
RD
RD
Self Employed
Master's Degree
1,164 satisfied customers
7-44 Cash Budgeting for a Hospital Highline Hospital provides
7-44 Cash Budgeting for a Hospital Highline Hospital provides a wide range of health services in its community. Highline's board of directors has authorized the following capital expenditures: Intra-a… read more
Falak Naz
Falak Naz
Master's Degree
324 satisfied customers
I am Power of Attorney of my mother, (an Alhezheimers ...
I am Power of Attorney of my mother, (an Alhezheimer's patient) and her home is in her name. She has "quit claim deeded" the home to my sister and I within the last year but the deed has not yet been … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x