Building Components

[LQ Helper]

What are the components of a building. We are doing a comprehensive repair & maint on our 15 year old air conditioning units and some think it should be building repairs & maintenance and some think it should be equipment repairs. What constitutes equipment and what constitutes building? Oh what a dilemma.

[NeilZ]

What are the components of a building. We are doing a comprehensive repair & maint on our 15 year old air conditioning units and some think it should be building repairs & maintenance and some think it should be equipment repairs. What constitutes equipment and what constitutes building? Oh what a dilemma.

What you are talking about is the definition of 'real property':

real property

n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

I would think that HVAC equipment is firmly attached thus qualifying as building repairs. Under this definition then, the roof, walls, electrical, sidewalks, stairs and parking are all considered building repairs. Washers & dryers (even gas), fridges, etc are considered equipment.

[LQ Helper]

Thank you for you reply but no, that is not what I am asking. All I am asking is if I should post the expense to equipment maintenance & repairs or building maintenance & repairs but I came across this IRS regulation regarding building and overall UOP and wanted to know if it pertains.

On Sept. 13, 2013, the Internal Revenue Service (IRS) released final rules concerning when taxpayers must capitalize and when they may deduct an expenditure related to acquiring, producing, maintaining or repairing tangible property. The final rules replace and remove previously issued temporary regulations under Internal Revenue Code (Code) Sec. 263(a) and 162(a). These new regulations must be followed by all taxpayers for tax years beginning Jan. 1, 2014. At a taxpayer’s choosing, these rules may be followed by taxpayers for tax years beginning Jan. 1, 2012.

Here is the link to the article: http://www.ksmcpa.com/news-blog/the-fin ... ss-part-ii that tells what the building components are and which components are not.

I really don't know which way to turn. Does this apply to everyone including businesses, non-profits and individuals or everyone except non-profits or just businesses?

[NeilZ]

Thank you for you reply but no, that is not what I am asking. All I am asking is if I should post the expense to equipment maintenance & repairs or building maintenance & repairs but I came across this IRS regulation regarding building and overall UOP and wanted to know if it pertains.

On Sept. 13, 2013, the Internal Revenue Service (IRS) released final rules concerning when taxpayers must capitalize and when they may deduct an expenditure related to acquiring, producing, maintaining or repairing tangible property. The final rules replace and remove previously issued temporary regulations under Internal Revenue Code (Code) Sec. 263(a) and 162(a). These new regulations must be followed by all taxpayers for tax years beginning Jan. 1, 2014. At a taxpayer’s choosing, these rules may be followed by taxpayers for tax years beginning Jan. 1, 2012.

Here is the link to the article: http://www.ksmcpa.com/news-blog/the-fin ... ss-part-ii that tells what the building components are and which components are not.

I really don't know which way to turn. Does this apply to everyone including businesses, non-profits and individuals or everyone except non-profits or just businesses?

My suggestion is that it only pertains to businesses who actually have to pay business taxes, not a non-profit such as a church. Businesses can basically deduct a lot of expenses such as building and equipment maintenance, and whether the item is 'real property' or not is VERY important as it has definite tax implications. However, churches and many religious organizations do not have to pay business taxes, thus the discussion above is moot.

However, I would definitely contact an accountant who knows tax law, they can probably give you some informed advice.

That said, I think your overthinking this. HVAC is normally classified as real property, part of the building, thus falls under building repairs, that's all you should have to worry about.

[LQ Helper]

Thank you so much, and yes, I probably am overthinking it. Sometimes we get ourselves off on a rabbit trail when we should stick to the road.
Thanks again