| If I breakdown the heater replacement into heater cost, install cost and miscellaneous costs - each component
| is less than $2500. Two questions:
| 1. Can I deduct all these as expenses (including tax)
I don't know. Pub 535 says "The amount paid for the property does not
exceed $2,500 per invoice (or per item substantiated by invoice)" ... so if the invoice calls those items separately it would appear so. But the repair regs are very complicated so I won't give you a definitive answer. You might want to do more research in the safe-harbor and see if you can find some examples of splitting an single invoice up. For example does "item" mean a physical item or does it mean a billing unit? It could mean the heater and installation costs. But if there was a heater and an air conditioner on the same invoice you could split it up. I just don't know. Here is one article addressing the general area of splitting invoices. https://www.journalofaccountancy.com/issues/2014/may/20149424.html
| 2. I also live in the property, so I rent out 2/3rd of the property. Do I need to only put 2/3rd of the heater as
| expenses?
Very good question.
If you live in the building (or just don't rent out some of it) you must allocate each and every expense between rental and personal. TT will help you do that during the interview.
Some expenses are 100% rental. E.g. a plumber call to fix a tenant's leaking sink. Some expenses are 100% personal (your unit). Some are mixed (painting the house, common electricity).
You can choose any reasonable method to allocate the shared expenses. It could be per unit (I'm guessing there are 3 and you live one). It could be by area. Maybe one unit is smaller or bigger. (E.g. has more people living it in using more hot water). But you must be consistent.
See https://www.irs.gov/pub/irs-pdf/p527.pdf page 16 ("Renting Part of Property" for details.
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