Last October 2023 I had a contractor finish remodeling / repairing unit 1 and then finish remodeling / repairing unit 2 in December 2023. The first unit he invoiced for while the second unit he never did but he did provide an estimate for. As I did before he started the work, I asked him again for his W-9. He never responded. To this day I have not heard back from him.
Unit 1 was in service last October 2023 while unit 2 was placed into service last January 2024.
Because unit 1 was a non-descriptive invoice I went ahead and did the whole thing for a 27.5 year depreciation starting October 2023. I figured at the time that he would eventually come around for his money.
However unit 2, without an official invoice, I am presuming the descriptive estimate is good enough? Within this estimate there are some portions which can be expensed out or De Minimis however some will need to be depreciated over 27.5 years.
Since depreciation starts at time of placed in service I'm wondering if I should go ahead and expense the non paid for invoice / estimate??? At first I figured I'd just hold off but there is a 5 year statute of limitations where I imagine he could come around and try and collect since the work was done.
Is it more wise to simply depreciate both units over 27.5 years but then have to "recapture" this down the road if he never does collect or should I still "expense" the portions of unit 2 even though I haven't paid him anything?
If I do nothing then I'm concerned that I just lost years of depreciation on a very long 27.5 year recovery. Thoughts?
