Capitalising construction expenses

anna.pochigayeva · ‎September 22, 2020

What is the correct way to capitalise construction expenses we did on the new office? should each charge be capitalised as it is entered or should the cost be transferred on a monthly basis with a JE? I'm concerned that some of the vendors need to be issued 1099 forms when the year ends and that i need to make sure that their fees are in the correct account to be included in the correct sections of 1099 forms.

Thanks!

john-pero · ‎September 22, 2020

Create a separate expense account for capitalized repairs. Include that account as eligible for 1099. Do not map it to your tax form (your tax accountant will ignore it as an expense) ONce the project is complete and move-in ready (in service) you will create a journal entry, credit the capex account and debit a new fixed asset account for the office reno. This amount will then start to be depreciated over its IRS determined life

View solution in original post

john-pero · ‎September 22, 2020

Create a separate expense account for capitalized repairs. Include that account as eligible for 1099. Do not map it to your tax form (your tax accountant will ignore it as an expense) ONce the project is complete and move-in ready (in service) you will create a journal entry, credit the capex account and debit a new fixed asset account for the office reno. This amount will then start to be depreciated over its IRS determined life

anna.pochigayeva · ‎October 07, 2020

Thank you!

Topics

Training

Community

Resources

Capitalising construction expenses