Church Building depreciation

[raylaurenza]

I just started using power church last year(2009). I set up asset of land and building separately. i also set up loan liability on the church.

Do I have to depreciate the church building each year(value at $577,000). If so, would I use a SL MACRS at 25 or 27.5 years, or other.

i am currently depreciating equipment, such as office and computers.

thanks for help.

[JohnDMeyers]

I am not an accountant, but...

I don't think you depreciate Land and Buildings. In fact, these are supposed to be appreciating in value, in theory, anyway.

You do depreciate Furniture and Equipment and vehicles, etc.

Here are a couple of links to previous discussions on this topic.

http://powerchurch.com/forum/viewtopic. ... ion#p18766

http://powerchurch.com/forum/viewtopic. ... ion#p17922

[AWELCtreas]

Actually, you do depreciate buildings. They have a useful life and their value does not always appreciate as we found out in 2008. Land, however, is not depreciated and is kept in a separate account from the building. The way that I have used to determine depreciation on the church building is to use the cost of acquisition less the value of the land and salvage value of the building itself. Since commercial property, according to IRS standards, has useful life of 39 years, that is what I used as the basis for straight line depreciation. For example, our church building acquisition cost was $649457 including land which had a cost of $200,000. I deducted a salvage value of $10,000 (it's not scientific & I'm not spending half a day to figure it out) and the cost of the land at $200k from the $649,457 leaving a depreciable value for the building $439,457 before any depreciation has been applied. Dividing the $439457 by 468 mos (39 yrs) = $939.11 of depreciation for each month of building existence. In this case, it is 92 mos of depreciation or $86398.12 to be deducted from the cost of the building before entering the opening balance ($353,058.88) for the building account. Set up your repeating transactions and it shouldn't be that much of a hassle. Acquisition cost might not be the absolute best way determine the initial values, but like I said, I am not going to torment myself. When the church wants to expand and applies for a loan they will be able to present a reasonable picture of the church's position, finances and outlook for the future.