How do I classify the expense of tree removal on our rental?

[charjean47]

I believe the tree removal is an expense because the tree was dead and we were concerned about the safety of our house or a neighboring house.  It was vacant at the time.  Should the expense fall under "Cleaning and Maintenance"?  Thanks

[PaulaM · Accepted solution]

If the tree removal was necessary for overall safety of structure/tenants or resulted from weather damage (I assume this is your case), then it is an expense. The expense category you selected will work.

If the tree removal was part of a landscaping endeavor, then you would capitalize and depreciate.

https://www.irs.gov/pub/irs-pdf/p527.pdf

[charjean47]

Thank you

[PaulaM]

You are welcome!

[gard028sb]

I had a tree on my rental income property with rot at the base and leaning toward the house.  Was in danger of falling on the house so I had it removed.  I understand I can deduct the cost as an expense, but how much documentation is required?  I have the contractor's estimate, final bill, and receipt.  And before and after photos.  But all the estimate says is "Leaning tree between buildings with decay at base".  Is it recommended to get a more in depth note from the contractor to clearly state it needed to be removed to avoid property damages and possible injury?

[stevekayak]

Be careful with tree work...  As per pub 527....

"If you replace the house, you would have to destroy the bushes and trees right next to it. These bushes and trees are closely associated with the house, so they have a determinable useful life. Therefore, you can depreciate them. Add your other land preparation costs to the basis of your land because they have no determinable life and you can’t depreciate them."

15 years is the schedule for shrubbery/tree "closely associated with the house".

[Carl]

If the tree removal was part of a landscaping endeavor, then you would capitalize and depreciate.

Just because of the way the above is worded, it could very easily be misunderstood. Especially in the context of this thread if the reader isn't paying attention. So for others reading this, if you think that statement applies to you, please ask.

For the context of this particular thread, there's no way this even comes close to a property improvement that's capitalized/depreciated. That's because the OP specifically and explicitly stated it was a potential safety hazard. It's removal did not add one penny of value to the property. Therefore it's a qualified and deductible rental expense, hands down. It if were me, I'd report it as a cleaning/maintenance expense since it's apparent the property owner is "maintaining" the rental property to keep it safe for tenants in this case.