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jamesrath1970
Level 3

Can you deduct special assessments on a rental property?

We have a single family home that we rent out all year.  Can we deduct the city's special assessments?

4 Replies
Critter
Level 15

Can you deduct special assessments on a rental property?

If you rent your home to others, you can deduct depreciation, repairs, upkeep, dues, interest and taxes, and assessments for the care of the common parts of the structure. You cannot deduct special assessments you pay for improvements. Improvements must be depreciated. 

Hal_Al
Level 15

Can you deduct special assessments on a rental property?

No. You depreciate it. Enter it as a new asset

jcorrigan10
New Member

Can you deduct special assessments on a rental property?

 

 

 

 

 

 

 

 

 

 

 

 

 

Is replacement of EIFS, Railings and windows on a 36 year old rental condominium building expansible or depreciation?

Carl
Level 15

Can you deduct special assessments on a rental property?

It's depreciated, because it meets both requirements to be classified as a property improvement.

Property Improvement.

Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.

To be classified as a property improvement, two criteria must be met:

1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.

2) The improvement must add "real" value to the property. In other words, when  the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.

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