Yes. You can deduct it as an expense on Schedule E. The "upgrade" is an improvement. It is anything that increases the value of
the property or extends its life is categorized as a “capital expense” or “improvement” and must be capitalized and depreciated over multiple years.
The
general rule is that the cost or interest on “repairs” incurred to maintain your rental properties may be
deducted. Some repairs are considered “improvements” in
which you’re not allowed to deduct the entire expense immediately.
https://turbotax.intuit.com/tax-tips/rental-property/tax-deductions-for-rental-property-depreciation...>
[Edited 1.17.18 | 12:51pm]
