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Level 1

How do I enter tenant improvement expenses that will be reimbursed by the landlord?

I negotiated a $25,000 tenant improvement from my landlord. I have to pay for this and then will be reimbursed when the work is completed and I move in. How do I record these expenses and then the reimbursement? 

2 Comments
Level 12

You can expense it almost the same way the landlord will,...

You can expense it almost the same way the landlord will, as a capital asset improvement. But i would book it as repairs since you wnill need to track it to issue 1099s to your contra ctors and vendors anfd you will be receiving one from the landlord.

Plan ahead any contractors you can pay by credit card or paypal do not get a 1099 from you

Anonymous
Not applicable

If its an improvement to the landlords building that the...

If its an improvement to the landlords building that the landlord is paying for it, then Im not sure that is your asset at all - I think its the landlords asset.  If the landlord is paying for the work, then you probably pay the landlord rent during that period.

If so then I think all the expenses would simply be backcharged to the owner ultimately resulting in zero net to the business.

It would be a different situation if the landlord waived some rent and you paid for the work - then it would be a TI asset to the tenant.

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