I am the co-owner of a commercial property that is leased to 2 businesses on the first floor and offices on the second floor. We recently had to install an expensive fire sprinkler/suppression system due to city codes for a restaurant that we leased to.
Section 179 appears to allow for us to expense this purchase but it is not completely clear. As i read it, if renting the property is considered a business to us, then we can deduct if the property is just an investment to us then we can't. It is actively managed by a professional property manager and all of the co-owners are active participants in the decisions that go into leasing, maintenance etc. There will still be positive income on the building even with this expense.
Can we expense this improvement this year per section 179 or do we need to depreciated it?
Thank you for your thoughts.
