Rental insurance claim - flooring

[sCvHeaVenS]

I received $4705.02 for an insurance claim for damaged flooring.  Minus $1000 deductible I got an actual check for $3705.02.

The actual replacement cost was $4839.66 which means I had $1134.66 out of pocket.  Since this was a repair, can I claim this as a repair under the De Minimis Safe Harbor or because the actual repair was over $2500 do I have to capitalize?

Thanks,
Jeff

[sCvHeaVenS]

I should also probably note that any damaged flooring between tenants was always replaced.  The floor was 6 year old laminate and looked brand new as I replaced any previously damaged planks.  The only actual improvement was I repainted the baseboards, but I did that myself, at a later date, and thus I would think doesn't count.

Thanks,
Jeff

[AnnetteB6 · Accepted solution]

If the flooring was repaired, you would deduct the cost as a repair.  The Deminimis Safe Harbor Election does not really apply to repairs so you would not have to claim that.  The safe harbor election applies to items purchased for the property that are not going to be depreciated rather than the cost of repairs.

Also, do not forget to include the $1000 deductible that you 'paid' along with the other out of pocket cost of the repair.

As for the baseboards, even though you provided the labor yourself, you can claim the cost of the paint and supplies used as a maintenance cost.

[sCvHeaVenS]

They were unable to match the existing flooring so they had to replace the entire downstairs area, that is why I'm questioning whether it's a repair or a capital improvement.

[Vanessa A · Accepted solution]

If the entire downstairs was replaced, then yes, this would fall under the Deminimus safe harbor as it would then be an improvement instead of a repair.  Either way, it will be an item that you will fully deduct your costs on this years return since it was under $2,500. 

[sCvHeaVenS]

Thank you!

Just to clarify, even though the cost was over $2500 (~$4800), since what I'm deducting, my actual cost of ~$1100, is under $2500 it's OK to claim?

[ThomasM125]

Yes, you would list your net cost of $1,100 as a repair.

[sCvHeaVenS]

Thank you both very much!