New small business - accounting question about expenses

[niknak]

Hello smart people!

I started a business this year in my basement making things from metal. As a result, I made some built-in custom shelving and workbenches for the workspace. The shelving is now part of the basement and cannot be removed without significant effort.

My question is how I should treat this expense in my books. It's not technically furniture since it's built into a wood wall I framed over the concrete basement wall. It also doesn't really seem to be a capital improvement because it really doesn't add value to my house. I'd like to treat it as an expense, like a repair, so I don't have to deal with depreciating it, but I don't know how to categorize it properly in my accounting software (Wave).

I'd appreciate any insight. Thanks!

[anonymouscow]

I don’t know the software, but if you can’t find a specific category then there should be one for miscellaneous expenses.

That’s just my guess though, there might be a better way to label it.

[Michael in ABQ]

It sounds like a fixture or a trade fixture. Not sure about how to handle it from an accounting perspective though.

[Dogastrophe]

How many dollars are you talking about?  Is it a material amount?  This will determine where you should classify it.

[SeattleCPA]

You don't give the amount, but I would be surprised if you can't expense it.

Probably it counts as furniture if you can remove it (even if only with difficulty). And if it is furniture, you can probably expense it (since probably items cost $2500 or less and that's the "tangible property regulations" threshold.) And if you can't expense it using "tangible property regulations" you can probably use bonus depreciation to in effect fully deduct in year you place into service.