Technically, what you have is a property improvement. With that line of thinking the following is true:
The property improvement is capitalized and depreciated beginning in the year it is placed in service. It flat out does not matter when it was paid for, or when it will be paid for. The entire cost of the improvement gets entered as an asset in the tax year that improvement is "available for use" and depreciation starts on the "in service" date of that asset.
Now the other line of thinking is that since the improvement is less than $2,500 (if claimed as such in the tax year each payment is made) *and* it's a community property improvement that does not apply to *your* *specific* *unit* (or units if you have more than one) then you can expense it each year under the de-minimum safe harbor act, for the amount you pay each year, provided that payment is less than $2,500 each year you pay it.
Personally, I would expense it each year, the exact amount I paid each year. Makes my life easier in the long run. I'd enter it in the "Miscellaneous Expesnses" section and label it for what it is; "Special Assessment" and enter the $525 amount I paid.
Now while you can if you want, capitalize and depreciate it (per the above guidance), in my opinion (and we all know what opinions are like) it doesn't "really" add value to "your" unit, and it's definitely not a property improvement that affects "only" your unit. So that's why I would just expense such a small amount each year.
Besides, over four years your total cost will be $2,100 and you can't put a new roof on a doghouse for that low a price now-a-days. 🙂
