Obviously, any improvements that are attached and affixed to your rental real property in such a manner as they become permanent components of the real estate are considered to be real property.
For the purposes of tax reporting, the goal should be to wrap as many of the components as possible into the Section 1250 bucket since the federal income tax liability on unrecaptured Section 1250 gain (aka depreciation recapture) is capped at 25%. There is no cap on gain from the sale of Section 1245 property (personal property); it is subject to ordinary income tax rates up to the maximum tax rate of 37%.
As a result, you would be better off if you simply wrapped as many components as possible into the gross sale price (i.e., as Section 1250 property) rather than allocating a portion of that sales price to separate components.
