QB Issue Resolution:

Answer 1:

yes, payments by check or cash to the contractor do get reported on the 1099, if he is not taxed as a corporation.  You should have a form w-9 signed by the contractor.

 

Lease hold improvements are an asset, all costs to complete the improvement are part of the cost of the asset.  After the improvements are finished and the property is placed in service then that total is moved from the construction asset account to a fixed asset account and then is subject to annual depreciation per IRS pub 946

Answer 2:

Yes, that is correct it is part of the costs to complete the improvement.

 

You can check these articles about depreciating and recording assets in QBO:

Resolution for Issue 'How do you record leasehold improvements for a brand new lease space? Is that considered CIP and reclassified as an asset? Or do I expense it? The space is brand new and just a shell, and we have to construct inner walls and stuff. We have been making downpayments to the contractor, but I don’t know whether to capitalize or expense it. Also, do we need to issue a 1099 to the contractor??' available: Yes (Solved).
Source: Intuit Community forum.

How do you record leasehold improvements for a brand new lease space? Is that considered CIP and reclassified as an asset? Or do I expense it? The space is brand new and just a shell, and we have to construct inner walls and stuff. We have been making downpayments to the contractor, but I don’t know whether to capitalize or expense it. Also, do we need to issue a 1099 to the contractor??: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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