No, there isn't. If you need to fix something on your rental, it is fully deductible.
However, you need to determine the difference between a repair and an improvement.
You add the cost of
capital improvements to your tax basis in the house. Your tax
basis is the amount you'll subtract from the sales price to determine the
amount of your profit. A capital improvement is something that adds value to
your home, prolongs its life or adapts it to new uses.
There's no laundry
list of what qualifies, but you can be sure you'll be able to add the cost of
an addition to the house, a swimming pool, a new roof or a new central
air-conditioning system. It's not restricted to big-ticket items, though.
Adding an extra water heater counts, as does adding storm windows, an intercom,
or a home security system. (Certain energy-saving home improvements can also
yield tax credits at the time you make them.)
Here are some more
capital improvements:
- Remodels and room additions
(including decks and porches)
- New or upgraded landscaping,
irrigation, sprinkler system
- Hardscape such as pavement,
block or retaining wall, patio
- Fencing
- Swimming pool, spa
- Storm windows, doors
- New roof
- Central vacuum or security
system
- Upgraded wiring, plumbing,
duct work
- Central heating, AC,
humidifier
- New furnace, water
heater
- Filtration, soft-water, or
septic system
- Built-in appliances
- New flooring or wall-to-wall
carpeting
- Upgraded insulation
- Satellite dish
The cost of repairs,
on the other hand, is not added to your basis. Fixing a gutter, painting a room
or replacing a window pane are examples of repairs rather than improvements.
Repairs are a
deductible expense in the year paid for a rental, but unfortunately, never
deductible for your personal home.
