If I add an item as asset to my property rental (like a water heater), can that same amount be included in my contractor expenses?

[12rkdouglas]

I hired a contractor to renovate a rental property.  In those expenses are high dollar items I have itemized as assets to depreciate them.  Am I incorrectly entering amounts if I include as an asset but also include as a contractor expense?  I paid the contractor for removal and disposal of the old water heater and installation of a new, contractor supplied water heater.  The amount I paid does not distinguish between labor cost and material cost.

[Leonard · Accepted solution]

No, you can only deduct an expense one time.

The labor to install the water heater, in your question, should be added to the cost of the asset.  You do not have to distinguish between labor and material, water heater in your question, cost to determine the cost basis of the asset.

The cost basis of an asset includes the actual cost of the asset plus any labor to required to install the asset.