@Carl wrote:
So the furnace/AC is not an appliance. (This is a "really" grey area for a hot water heater, but that's another story.)
There is no "grey area" since the IRS clearly considers a new water heater to be an improvement.
See https://www.irs.gov/publications/p527#en_US_2020_publink100071091
Regardless, a new water heater (as is the case with all improvements) would qualify for the de minimis safe harbor election provided the invoice was $2,500 or less.
