My client rents a building to her other business. Thus, this is a self-rental since she materially participates in the other business activity. If we go to schedule E with all of the additional depreciation as a result of a Section 481(a) adjustment, it most likely will create a substantial loss. Will we get trapped by IRC Section 469? The clients other income will be over $150,000. Is there any special rule in this situation?
An owner of residential property, which is leased to another party, had the swimming pool resurfaced, and pavers installed on the deck. Does this have to be depreciated over the 27.5 years, or can it be a shorter period since this usually lasts about 10 years. Also, replaced garage doors, and the gutters – over how many years can these be depreciated? 27.5 years seems to long for these items. Roof replaced, which we will use the 27.5 years straight-line for depreciating residential rental property.
Our small business began building fiber networks in the past. At that time, we expensed the cost of building the networks due to the fact that we used the networks to provide services. However, we now believe the cost should have been capitalized and treated as real property. How do we go back and capitalize our fiber networks? What should be done to fix our books? What do we need to do to correct any government filings? What are the risks of changing our method of accounting to reflect the capitalization? How can we prepare for a potential audit that this may cause?