JulieH1
New Member

Deductions & credits

Are you talking about a rental property?  

Septic Tank replacements and improvements such as yours increase the cost basis of your home which may benefit you at the time of sale but are not deductible. The higher cost basis, the lower your profit, the lower your tax bill.

If it is a rental property, the IRS considers a septic system to be a capital improvement rather than an expense on a rental.  So you'll depreciate it over 27.5 years rather than deducting it.  You could, however, possibly deduct the design and license in 2017 as expenses since you paid them in 2017.

Here is a link to IRS Publication 527, Residential Rental Property, which discusses all aspects of this topic.  Note table 1-1 beginning on page 5.

https://www.irs.gov/pub/irs-pdf/p527.pdf 

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