Title: GAAP Accounting for Capital Improvements | Bizfluent
Headings: GAAP Accounting for Capital Improvements
GAAP Accounting for Capital Improvements
TL;DR (Too Long; Didn't Read)
Fixed Assets and Useful Life
Repair vs. Capital Improvement in GAAP
Expense and Improvement Bookkeeping
Improvements to Land
Depreciating Capital Improvements
Setting the Cap Limit
Case by Case
Must I Use GAAP?
Capital Improvements and Taxes
Section 179
Bonus Depreciation
Tax Depreciation of Improvements

Content: If you depreciate a capitalized improvement under GAAP accounting, you do it straight line, depreciating the same amount each year until the asset's useful life runs out. Under IRS rules, you have several methods for claiming depreciation as a business deduction: Section 179
Bonus depreciation
Regular depreciation
Accelerated depreciation
Section 179
Section 179 allows you to claim the entire cost of a qualifying capital improvement as an expense for the year you made the purchase. You can claim up to $1 million in improvements and purchases, although there are some limits on the deduction that lowers that ceiling. The IRS exempts some building improvements from Section 179. If you're installing an elevator, enlarging the building, or renovating the structural framework, Section 179 is not an option. Nor does Section 179 allow you to write off exterior improvements, only those on the building interior. Bonus Depreciation
Bonus depreciation gets you the same benefits as Section 179 by a slightly different route. Rather than expense the capital purchase or improvement, you can take a large chunk of depreciation upfront. In late 2019, you can deduct 100% of qualifying capital spending, but that percentage will drop af