- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Depreciate over 27.5 years or deduct currently?
Sorry if I vent in advance, but the depreciation rules under the IRC are a scandal. 😄
There are so many definitions and complexities; I pray one day the government simplifies these rules. OK, I'm done...enough!
We have two pieces of residential rental property and all the tenants are on one year leases.
Building A is a duplex and Building B is a 4plex.
Building A duplex -
During 2024 in one of the two units we remodeled a bathroom for $11,000; this work comprised a new toilet, new cabinets, new shower, new sink, and a bathroom paint-job.
What do you think? Does the bathroom remodel get a 27.5 year life? Or could it simply be a periodic repair?
Building B 4plex -
The work done on the 4plex for 2024 involved only one of the four units; for that one unit we replaced the floor covering (vinyl fake hardwood) for $10,000.
Because this is only 1/4th of all the flooring in the 4plex building, is there any chance that the "3 out of 10 HVAC Units" rule found in the example of Reg. Sec.1.263(a)-3(k) (7) Example 18 (below) could apply such that the cost of the floor job would be treated as a deductible repair?
"The three roof-mounted heating and cooling units are not a significant portion of a major component of the HVAC system under (k)(6)(ii)(A) of this section, or a substantial structural part of the HVAC system, under paragraph (k)(6)(ii)(B) of this section. Accordingly, O is not required to treat the amount paid to replace the three roof-mounted heating and cooling units as a restoration of the building..."