Replaced water heater (< $2,500) & HVAC (> $2,500) in rental. Does water heater meet criteria to be expense or do both need to be depreciated? What is annual election?

janefrancis126 · ‎June 6, 2019

I replaced both my water heater (less than $2,500) and HVAC (greater than $2,500) in my rental property in 2017. I meet the annual election criteria. Do both qualify as 'improvements'? If so, does the water heater meet the criteria to be expensed, or do both the water heater & HVAC need to be depreciated? How is depreciation reported in future years?

Replaced water heater (&lt; $2,500) &amp; HVAC (&gt; $2,500) in rental. Does water heater meet criteria to be expense or do both need to be depreciated? What is annual election?

Replaced water heater (< $2,500) & HVAC (> $2,500) in rental. Does water heater meet criteria to be expense or do both need to be depreciated? What is annual election?