Hello,
My rental property lease required Tenant to sign up for and pay for local water softening service – it was a tank service (Our water is terrible on plumbing/appliances). They will likely be long term (multiyear) tenant and asked me if they could instead have a water softener installed - if they supplied the water softener and paid for any necessary Plumbing modifications. I said yes (I'm now thinking for tax simplicity I should have sad no, but water under the bridge). They supplied Water softener and then I arranged for my plumber to do the work (he was already going to be onsite for an owner covered repair - so had him do work at same time - he provided separate invoice for water softener). I paid the plumber, then Tenant venmoed me to reimburse (~$500)…I asked them not to pay me via Avail rental collection service as figured that would really screw things up. Under this scenario, if tenant ever moved they could theoretically take the water softener with them, and I could either install an owner supplied softener, or have next tenant rent one from the Water Service Company.
But for now, I was curious if I need to report either or both tenant supplied items (equipment plus plumbing mod) as income? Since equipment can theoretically be removed I’m thinking I don’t need to report that, but plumbing mods might (?) be considered an upgrade. I’m leaning toward not reporting either, but would appreciate some TT input. This was all 2023. Many Thanks, E.
