Thanks. If I understand correctly, anything that is not depreciated over time will not be added to cost basis.
Some improvements are depricated over 5 years such as appliance, carpet. Some improvments are depriciated over 27.5 years such as HVAC.
How these are added to cost basis considering these are not included part of Safe harbor. Does appliance expenses stays in cost basis only for 5 years and HVAC expenses stays in cost basis for 27.5 years?
For eg: If current cost basis is 500,000. Appliance replacment cost is 3,000 and HVAC replacment cost is 7,000. Would my new cost basis would be 510,000 ? Would it reset to 507,000 after 5 years assuming there is no new improvments done?
