I have a 5 year lease for my retail business that began in 2016. During the buildout to open the business, I had to install flooring (leasehold improvements asset)for $14,186 on 11/1/16. For 2016 taxes I used Quickbooks and Turbotax to file my taxes and used 200DB/MQ method and took $709 depreciation on taxes. Used 5 year life as this is the term of the lease.
Then, my landlord paid me back $10, 899 as leasehold improvement allowance on 7/17/2017 for the flooring. I booked that check towards the cost of the flooring asset which lowered the assets cost.
Now my question is, how do I figure the depreciation for that asset for 2017? I am using TurboTax for business and am not sure how to make an entry.
If you used TurboTax last year, then you should be able to import last year’s data so that the depreciation calculations carry over to this year’ tax return. With that said, TurboTax should ask you whether or not you still have that asset along with a series of questions that would guide you as to how to handle the depreciation for this year. If that is not happening or if you were not able to carry over the data from last year, I would reach out to the support team at TurboTax. I know that they have expert CPA’s and EA’s who can answer these type of questions for you and even look over your return.
Thanks so much for reading!
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