Thanks a bunch, @Cham , for your detailed response. So, based on the definitions, it is repair - "expenses incurred to return the property or its assets to the same usable condition they were in". And this is a rental unit; I have lost rent as well as it is unusable and my tenant has been staying in a hotel. I have the following questions:
A.) Within Turbotax, do I report it under Wages and Income --> Rental and Royalty Summary --> Any Repair Expenses ?
B.) Because it is repair (not replacement / improvement), I think, I can report/deduct entire amount out of my pocket (insurance premium + uncovered amount by insurance) in the year and do not need to expense over 27.5 years. Please confirm.
C.) This water damage has depreciated my condo's value. How do I compute this depreciation?
D.) Wondering if I can report lost rent? if so, how?
And, thanks for sharing the IRS link. From the section "What is the de minimis safe harbor election?" :
i) how do I get this "applicable financial statement (AFS)" ?
ii) Wondering if restoration of property falls under "production of property" from the definition below?
The de minimis safe harbor is simply an administrative convenience that generally allows you to elect to deduct small-dollar expenditures for the acquisition or "production of property" that otherwise must be capitalized under the general rules.
Thanks!
