tax category question

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Sunshine

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We put a new pond/waterfalls, watergarden, wooden bridge, arbors, and flowers in our yard last year for our guests. Total spent was around $1,000. (I'm really proud of that cuz we saved $7,000.!)
What category does that come under when filing taxes??
 

Tom

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I don't think your improvements are deductable as an expense if they have long term value - you will have to consider them an addition to property for depreciation and either expense it under section 179 or depreciate it on a schedule of 5 years.
But if the inn is also a personal residence - not exclusively commercial - I don't think it can be depreciated as a business property at all because it is the outside of your home, not 100% and solely used by guests.
See U.S. master depreciation guide, CCH Tax Law Editors, paste this link
http://books.google.com/books?id=s-56HeG_q1MC&pg=PA138&lpg=PA138&dq=bed+and+breakfast+tax+code+depreciation&source=bl&ots=ySsg39H6Wf&sig=uT2h1fa0DKPPzKITGR3uf2RiNXQ&hl=en&sa=X&ei=wSEuT-zpJcOviQKsyfjGCg&ved=0CFIQ6AEwBw#v=onepage&q=bed%20and%20breakfast%20tax%20code%20depreciation&f=false
It deals with bed and breakfast specifically.
( and look on the following page for an interesting tax case on what someone was able to depreciate as business property)
I am not a tax professional; consult one if you need a professional opinion. I am in the same boat and I decided I can't deduct/depreciate my outside garden and improvements, based on this reference and some other similar info.
 

JBloggs

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Outside is not deductable if you live there. Even though we know it is for the B&B totally and for guest use.
 

EmptyNest

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Sorry, I don't think it is deductible. Our CPA would not allow it. You live there and it is for your enjoyment..not just guests.
 

bunkhouse

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I just bought a home and converted it to a B&B. It needed a lot of repairs. I used my 401K money. Can I deduct the purchase of the property on my taxes? Thanks.
 

Madeleine

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I just bought a home and converted it to a B&B. It needed a lot of repairs. I used my 401K money. Can I deduct the purchase of the property on my taxes? Thanks..
bunkhouse said:
I just bought a home and converted it to a B&B. It needed a lot of repairs. I used my 401K money. Can I deduct the purchase of the property on my taxes? Thanks.
You need a tax attorney/accountant to answer these questions. We're all B&B owners and we really can't advise you on such a big question as writing off the purchase of a property.
 

toddburme

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You can deduct repairs but not improvements. I do not live in my B&B so it is easier tax wise for me.
The property is not deductible on your taxes. Take the price of the property subtract 20% and the remaining 80% is depreciated over 27.5 years. I use an accountant so if the years is wrong it is because I have not noticed the change. It will be on the depreciation schedule.
 

gillumhouse

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I just bought a home and converted it to a B&B. It needed a lot of repairs. I used my 401K money. Can I deduct the purchase of the property on my taxes? Thanks..
bunkhouse said:
I just bought a home and converted it to a B&B. It needed a lot of repairs. I used my 401K money. Can I deduct the purchase of the property on my taxes? Thanks.
You got things backwards and to the wrong people. You SHOULD have talked to a tax attorney BEFORE you tapped your 401k.
 

egoodell

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Sunshine said:
We put a new pond/waterfalls, watergarden, wooden bridge, arbors, and flowers in our yard last year for our guests. Total spent was around $1,000. (I'm really proud of that cuz we saved $7,000.!)
What category does that come under when filing taxes??
There may be some legal way around it, but the speakers at the last B&B conference where this was brought up (so this is a couple of years old as far as information) emphatically told me that no landscaping of any kind is deductable. They said it would only be deductable is if it was plants brought in to decorate for a function such as a wedding.
When we asked why they said that the IRS says that you are going to have outside landscaping whether you have a business or not so none is deemed deductable.
Again, this was a couple of years ago.
RIki
 

JBloggs

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Sunshine said:
We put a new pond/waterfalls, watergarden, wooden bridge, arbors, and flowers in our yard last year for our guests. Total spent was around $1,000. (I'm really proud of that cuz we saved $7,000.!)
What category does that come under when filing taxes??
There may be some legal way around it, but the speakers at the last B&B conference where this was brought up (so this is a couple of years old as far as information) emphatically told me that no landscaping of any kind is deductable. They said it would only be deductable is if it was plants brought in to decorate for a function such as a wedding.
When we asked why they said that the IRS says that you are going to have outside landscaping whether you have a business or not so none is deemed deductable.
Again, this was a couple of years ago.
RIki.
egoodell said:
Sunshine said:
We put a new pond/waterfalls, watergarden, wooden bridge, arbors, and flowers in our yard last year for our guests. Total spent was around $1,000. (I'm really proud of that cuz we saved $7,000.!)
What category does that come under when filing taxes??
There may be some legal way around it, but the speakers at the last B&B conference where this was brought up (so this is a couple of years old as far as information) emphatically told me that no landscaping of any kind is deductable. They said it would only be deductable is if it was plants brought in to decorate for a function such as a wedding.
When we asked why they said that the IRS says that you are going to have outside landscaping whether you have a business or not so none is deemed deductable.
Again, this was a couple of years ago.
RIki
Yes!
And another reason to let those new innkeepers or aspiring innkeepers know they need to take some classes. Funny how people want to spend big bucks to buy or open an inn and then take no classes in the field they are going into. Odd. Very odd. They won't even hire a consultant.

 

Colleen848

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
 

egoodell

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
 

Colleen848

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
 

JBloggs

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
.
Colleen848 said:
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
Not where we are, if you live there then it is your lawn, your shrubs, your garden no matter who does the installation. There is no capital improvement on those areas for us, not for a B&B anyway. The man to answer this MAY BE "ONE DAY" as he owns a prof landscaping biz. He was here this week on the forum, maybe he can shed some light on it...
 

Madeleine

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
.
Colleen848 said:
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
This is why we always tell people to hire a tax accountant or a tax lawyer in their own area. Given all the different counties, states, countries involved on this forum no one here should even attempt to help someone with a tax question. Even minor things, like a shrub for Pete's sake, can be different in every locale.
Here- it's the same thing as everyone else is saying- no can do on writing off landscaping.
Now, if you didn't LIVE at the apt house, that's different. We all live at our businesses. We can't write off landscaping our own yards because we enjoy the benefit of it.
 

Colleen848

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
.
Colleen848 said:
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
This is why we always tell people to hire a tax accountant or a tax lawyer in their own area. Given all the different counties, states, countries involved on this forum no one here should even attempt to help someone with a tax question. Even minor things, like a shrub for Pete's sake, can be different in every locale.
Here- it's the same thing as everyone else is saying- no can do on writing off landscaping.
Now, if you didn't LIVE at the apt house, that's different. We all live at our businesses. We can't write off landscaping our own yards because we enjoy the benefit of it.
.
You are not listening. I DO LIVE HERE.
I have an accountant who files my taxes on the long form which I assume will be done also when I open under a business form as I will be a DBA. She has me saving all of my receipts until I open as they are not pertinent right now.
Even though I am not a B&B, this is still considered a BUSINESS. I know you may be offended or perhaps not.
There are people here who comment on being a property owner and renting out is somehow inferior to your commitment. It is not. It is just different. Maybe if I were an absentee landlord I would deserve the attitude.
As I have said before I do not have to prepare their breakfast, make their beds and offer conceirge services to them. However, I do not have the opportunity to think okay, they are PITA'S but they will be gone in a couple of days.
No! I am stuck with them until they decide to move or I give them a 30 day notice. That is why I show my apartments, take applications and then decide. I don't care how much money they want to push on me, not impressed. I live here too and need to be able to feel comfortable with/ who lives here.
I am approx. 1/3 mile off the main road (that's the driveway length) so in the winter when the golfcourse is closed there are very few inhabitants here. When the power or something goes out, we all have to work together.
I look forward to opening a small B&B and I do not veiw it as a 18 hour a day job. If I am working out in the yard I appreciate the privelege of being able to do so. If I am baking, I find it relaxing.
I guess it's all in the way you see it.
 

JBloggs

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I guess the point of this whole thread is this is about a B&B landscaping and ponds. Not any other business. This is what the forum is geared toward. So from the pov of the innkeepers on the forum you cannot write off or deduct any yard/grounds improvements, but check with your accountant in your area, as you are the one dealing with the IRS and responsible. But from the training at innkeeper conferences, those who own inns and work with a ton of improvements on a regular basis, the answer is no, you can't.
 

Weaver

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I guess the point of this whole thread is this is about a B&B landscaping and ponds. Not any other business. This is what the forum is geared toward. So from the pov of the innkeepers on the forum you cannot write off or deduct any yard/grounds improvements, but check with your accountant in your area, as you are the one dealing with the IRS and responsible. But from the training at innkeeper conferences, those who own inns and work with a ton of improvements on a regular basis, the answer is no, you can't..
Always always check with your accountant, but with many years behind me and a father and grandfather that were both accountants, landscaping any property is considered a leasehold/property improvement and would be amortized, not be a deductible expenditure.
Same as any other large purchase such as the dreaded pool, a new stove etc. However repairs to the dreaded pool would be at some % deductible, I would venture to say not 100% since you can use it as well and any business expense not solely for the business is not 100% deductible.
just my 2 cents always consult the guy/gal with the license.
 

Madeleine

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
.
Colleen848 said:
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
This is why we always tell people to hire a tax accountant or a tax lawyer in their own area. Given all the different counties, states, countries involved on this forum no one here should even attempt to help someone with a tax question. Even minor things, like a shrub for Pete's sake, can be different in every locale.
Here- it's the same thing as everyone else is saying- no can do on writing off landscaping.
Now, if you didn't LIVE at the apt house, that's different. We all live at our businesses. We can't write off landscaping our own yards because we enjoy the benefit of it.
.
I have to correct myself...because we are a corporation, we CAN write off landscaping. Apologies. So it is how your business is set up, what you can write off and what you can't.
This is why I keep saying and should probably shut up about- you need to get an accountant for these things!
 

gillumhouse

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When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested..
Colleen848 said:
When I had my yard landscaped I used a local company. Because shrubs and plants were put in it became a "Capital Improvement". This is in New York.
My B&B is not open yet but I have always been a 3 family home.
The company that did the work had to report it to the government on a capital improvement form.
Because you did the work yourself, hats off to ya, it may not be deductible as such.
Consult with your accountant as others have suggested.
Each accountant will vary I am sure. But I was told that NO improvements in landscaping no matter who does it was deductable - but I'm talking federal, not state. That does not mean there are more ways than one to skin a horse. The accountant who was speaking was known for not having any creativity in seeking more than one way to work the numbers.
RIki
RIki
.
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
.
Colleen848 said:
The KEY to it being a Capital Improvement was based on the fact that I had shrubs, etc. planted. If I had just had the old overgrown, semi-dead bushes removed and paving stones, mulch, it would not have been considered a Capital Improvement.
Just a quirk in the law.
This is why we always tell people to hire a tax accountant or a tax lawyer in their own area. Given all the different counties, states, countries involved on this forum no one here should even attempt to help someone with a tax question. Even minor things, like a shrub for Pete's sake, can be different in every locale.
Here- it's the same thing as everyone else is saying- no can do on writing off landscaping.
Now, if you didn't LIVE at the apt house, that's different. We all live at our businesses. We can't write off landscaping our own yards because we enjoy the benefit of it.
.
You are not listening. I DO LIVE HERE.
I have an accountant who files my taxes on the long form which I assume will be done also when I open under a business form as I will be a DBA. She has me saving all of my receipts until I open as they are not pertinent right now.
Even though I am not a B&B, this is still considered a BUSINESS. I know you may be offended or perhaps not.
There are people here who comment on being a property owner and renting out is somehow inferior to your commitment. It is not. It is just different. Maybe if I were an absentee landlord I would deserve the attitude.
As I have said before I do not have to prepare their breakfast, make their beds and offer conceirge services to them. However, I do not have the opportunity to think okay, they are PITA'S but they will be gone in a couple of days.
No! I am stuck with them until they decide to move or I give them a 30 day notice. That is why I show my apartments, take applications and then decide. I don't care how much money they want to push on me, not impressed. I live here too and need to be able to feel comfortable with/ who lives here.
I am approx. 1/3 mile off the main road (that's the driveway length) so in the winter when the golfcourse is closed there are very few inhabitants here. When the power or something goes out, we all have to work together.
I look forward to opening a small B&B and I do not veiw it as a 18 hour a day job. If I am working out in the yard I appreciate the privelege of being able to do so. If I am baking, I find it relaxing.
I guess it's all in the way you see it.
.
Look, we do NOT put anyone down and I wish you luck if you think you can do a B & B and it NOT be an 18 hour day. Not being snarky, just speaking from experience.
I do not have a clue in Hell what is allowable and not in your current business but we DO know from expwerience what we - all over the map - have been told for B & B taxes. As we have stated several times - ASK THE ACCOUNTANT or whoever does you taxes in YOUR locale.
You can, as you said, screen your occupants. We however have to take whoever comes down the pike. Some of us have no choice in the kids/no kids and NONE of us have a choice when it comes to ADA animals. So I am going to be the b***** here and say it, get off your high horse and stop being huffy if we give an answer counter to yours. There are a lot of aspiring and newbies lurking and we do not want to give ANY misinformation. That is why we say what we can do where we are BUT ask the experts in YOUR area to be certain
 
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