Generally, the county doesn't mess with long term rentals to much - so long as you don't give them reason to. When I purchased my 3 rentals (at different times of course) they all came with the appliances already in them. So my cost basis on the entire property already included the appliances. Would be unnecessary paperwork to separate them for depreciation.
Now I've had appliances go bad over the years. For example, a dishwasher lasts on average 5 years. When that happens I just go out and buy a new dishwasher. Technically speaking, that's a property improvement. But the IRS says for those property improvements that cost less than $2,500 (plus meet a few other criteria) I can just expense them in the year purchased. This is referred to under the "safe harbor de-minimus" act. Apparently the IRS agrees that depreciating a $300 dishwasher over 5 years is stupid, as it makes not one penny of difference to your tax liability.
Now a central A/C unit is a different story. When I had to replace the outside compressor at a cost of $2,400 I could not invoke the "safe harbor" act to expense it. That's because by IRS standards a central A/C until becomes "a physical and permanent part of" the structure when installed. So I had no choice but to capitalize and depreciate. But on the tangible property tax that is also not considered "a separate peice of equipment" utilized in the production of income, since when installed it becomes " a physical part of" the structure. So no separate tangible property tax there.
The above also holds true for a hot water heater. The typical cost of a new hot water heater is $800 including installation. When installed a HW heater does in fact become a physical part of the plumbing system in the house, and of course the plumbing system is already a physical part of the structure. So a hot water heater is not eligible for the safe harbor expense deduction. It's unfortunate, but that $800 cost has to be capitalzed and depreciated over 5 years as "equipment". But again, my county doesn't see it as a separate price of equipment used in the production of income, since in the end it is "a phyiscal part of" the plumbing system, when is "a physical part of" the structure.
So the difference here (As I see it) is that while a built in dishwasher may be a physical part of the structure, if that dishwasher is removed the property is still 100% functional and livable. Dishes can still be washed in the sink.
But without hot water that's a different story - particularly for a family with small kids or an infant where hot water is a necessity for sterilization. While selling a house without a dishwasher is easy, good luck finding a buyer if there's no hot water.
