Replacing a furnace is a property improvement that typically gets capitalized and depreciated over time. However, if you paid a total of less than $2,500 (including installation labor, delivery, etc) then you may have the option to just expense the asset under safe harbor de-minimus. If this interest you, the rules can be complex. But you can read a synopsis of those rules at https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations
