I replaced windows costing $15,000. Can it be included on Schedule C under repairs & maintenance

[ack2]

I have a small home based business.  Can whole house window replacement of $15,000 be included on Schedule C, Repairs & Maintenance?

[Carl]

No. I assume this is for rental property. The windows meet the criteria of a property improvement. Therefore they are listed in the Assets/Depreciation section and are depreciated over 27.5 years.

[SweetieJean]

"small home based business".

[Carl]

Caught that already and have addressed it below. I question expensing the windows since they are "in fact" a property improvement and the cost is in excess of $2,500 meaning they don't qualify for safe harbor.

[SweetieJean]

I see that now!

[ack2]

Thanks

[MichelleT · Accepted solution]

Yes, you can list this under the Home Office deduction and the office portion of the repair will be calculated. This may result in having a deduction from this home office to carry forward to next year.

Or you can list large repairs/improvements under Assets.

Repairs for Entire Home - Home Office

These are repairs and maintenance expenses related to your entire home, such as painting your house (inside or out) or fixing your furnace.

**More extensive work, such as remodeling or adding a new roof, should be added in the Assets section as a home improvement and depreciated (written off over several years).

Repairs that benefit only part of your home, but not your home office, such as painting your kitchen, should not be counted as a home office expense (the expenses must either benefit your entire home, or specifically your home office).

[Carl]

Wait a minute. Just to clarify, this is NOT a "home office only" expense. It's a "whole house" expense. So make sure you enter the amount in the box that asks for whole house expenses so that only the percentage that applies to your home office is deducted. Note that if you did not replace any of the windows in the home office, then you can not expense this at all.
I still question this as a valid expense, when it is "in fact" a property improvement, and it exceeds $2,500 and therefore does not qualify for safe harbor.

[SweetieJean]

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[ack2]

Thanks

[Hal_Al]

No, it cannot be deducted on schedule C.

At best you can depreciate it as a home improvement on form 8829, Home Office Deduction.  So, using an example of your home office being 10% of you total home square footage:

$15,000 / 27.5 years = $545.   $545 x 10% = $55 deduction.