Architect Fees Deductible
MortgagePro21
property that ultimately never materialized. I paid him
$2,000 for the drawings and discussions. Is this deductible
as an expense on my Schedule E. Is it a basis adjustment?
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Frank S. Duke, Jr.
> I hired an architect for design changes in my rental
> property that ultimately never materialized. I paid him
> $2,000 for the drawings and discussions. Is this
> deductible as an expense on my Schedule E. Is it a basis
> adjustment?
If you had actually done the changes, I would say it should
be capitalized along with the construction. Since you
didn't, it should be expensed like tax advice or legal
advice. What is the worst that could happen? The IRS
disallows the expense and makes you capitalize it. Take it
now.
All freely provided advice guarantee correct or double your
money back
Frank S. Duke, Jr. CPA
Cincinnati, OH USA
Michael T Wing CPA
> I hired an architect for design changes in my rental
> property that ultimately never materialized.
I once claimed an "abandonment loss" (ordinary loss on Form
4797) for architectural fees related to a client's remodeling
plan after it became clear that the city would "never" approve
the project or issue required building permits. As I recall, a
key element to the deduction was that the plans had become
"useless". Otherwise, had the plans simply been put on the shelf
to await better times, capitalization probably would have been
in order.
MTW
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Office
> I hired an architect for design changes in my rental
> property that ultimately never materialized. I paid him
> $2,000 for the drawings and discussions. Is this deductible
> as an expense on my Schedule E. Is it a basis adjustment?
AGree here with Frank Duke, whose reply see.
Similar case here with a corporate client who paid for an appraisal on
the building and land it's currently renting with a view to buying the
property. Appariser had one figure but the landlord has a higher figure
in mind. So far they haven't met in the middle. So I simply recorded the
expenditure as a prepaid item for 2002. If nothing come to fruition this
year, we'll deduct it as an expense. (Can you spell miscellaneous?)
Cheer$,
Harlan Lunsford, EA in LA