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Level 1
posted Mar 19, 2025 1:00:05 PM

Expense it or Capitalize it

I have a condo that I rent. In 2024, we had a special assessment for $10K. Can I expense that or does it get added to cost basis and depreciated over time?

0 1 880
1 Best answer
Expert Alumni
Mar 19, 2025 3:59:02 PM

It depends on what was the special assessment for.

If considered repair, then deductible in the year it was paid.

If considered improvements, you add it to the cost basis and depreciate it.

 

For rental properties, repairs maintain the property's condition, while improvements enhance it by adding value or extending its life.

1 Replies
Expert Alumni
Mar 19, 2025 3:59:02 PM

It depends on what was the special assessment for.

If considered repair, then deductible in the year it was paid.

If considered improvements, you add it to the cost basis and depreciate it.

 

For rental properties, repairs maintain the property's condition, while improvements enhance it by adding value or extending its life.