Per your words: But the IRS rule reads "if the improvements exceed $10,000 or 2% of the adjusted basis, the expense does not qualify. Again my cost of the improvement/repair, is under $10,000, but my repair exceeds 2% of the unadjusted cost basis of the building.
- Less than or equal to the smallest of .... so because your repair does exceed 2% of the unadjusted basis (original cost) of the building even if it is below $10,000 it would not qualify for Safe Harbor.
- This election for building improvements is called the Safe Harbor Election for Small Taxpayers. If you decide to take this option, a form called Safe Harbor Election for Small Taxpayers will show up in your tax return. This election will apply to all your businesses, rental properties or farms. (IRS Tangible Property FAQs)
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