Depreciate over 27.5 years or deduct currently?

[donnalcop]

Sorry if I vent in advance, but the depreciation rules under the IRC are a scandal.   😄

There are so many definitions and complexities; I pray one day the government simplifies these rules.  OK, I'm done...enough!

We have two pieces of residential rental property and all the tenants are on one year leases.

Building A is a duplex and Building B is a 4plex.

Building A duplex -
During 2024 in one of the two units we remodeled a bathroom for $11,000; this work comprised a new toilet, new cabinets, new shower, new sink, and a bathroom paint-job.

What do you think? Does the bathroom remodel get a 27.5 year life? Or could it simply be a periodic repair?

Building B 4plex -
The work done on the 4plex for 2024 involved only one of the four units; for that one unit we replaced the floor covering (vinyl fake hardwood) for $10,000.

Because this is only 1/4th of all the flooring in the 4plex building, is there any chance that the "3 out of 10 HVAC Units" rule found in the example of Reg. Sec.1.263(a)-3(k) (7) Example 18 (below) could apply such that the cost of the floor job would be treated as a deductible repair?

"The three roof-mounted heating and cooling units are not a significant portion of a major component of the HVAC system under (k)(6)(ii)(A) of this section, or a substantial structural part of the HVAC system, under paragraph (k)(6)(ii)(B) of this section. Accordingly, O is not required to treat the amount paid to replace the three roof-mounted heating and cooling units as a restoration of the building..."

[AmyC]

See IRS Property Regulations state:

If an amount doesn't qualify under the de minimis safe harbor, you should treat the amount under the normal rules that apply, i.e., currently deductible if paid for incidental materials and supplies or for repair and maintenance. This treatment is proper regardless of whether the amount exceeds the applicable de minimis safe harbor limitation.

Building A  maybe you had repairs and other issues involved. Otherwise, remodel - leasehold improvement - 27.5 years.

Building B - new flooring -a carpet that pulls up can be depreciated 5 years while an installed floor is 27.5 years.