Good afternoon,
We are an LLC filing as S Corporation. One partner donated furniture as their capital contribution. Are we required to depreciation that furniture? We determined the FMV of the furniture and recorded a debit to the fixed asset furniture and a credit to capital contribution.
Our tax preparer didn't include this on our depreciation and said it can't be depreciated because it is capital.
I read and believe that we must depreciation the remaining life of the furniture. If the furniture is 2 years old, do we depreciate the remaining 5 years or do we start over at 7 years life?
Which is correct?
Thank you.
We are an LLC filing as S Corporation. One partner donated furniture as their capital contribution. Are we required to depreciation that furniture? We determined the FMV of the furniture and recorded a debit to the fixed asset furniture and a credit to capital contribution.
Our tax preparer didn't include this on our depreciation and said it can't be depreciated because it is capital.
I read and believe that we must depreciation the remaining life of the furniture. If the furniture is 2 years old, do we depreciate the remaining 5 years or do we start over at 7 years life?
Which is correct?
Thank you.