Repipe of 3 unit rental property

[EricBBL]

I have to repipe a 3 unit rental property because one of the units has a pipe coming out of the slab that has corroded away.  My understanding is that one way to handle to expense is to depreciate the cost over 27.5 years.  That makes the deduction for the repair cost very small compared to the cost I have today.

Is there a reasonable method for expensing more this year since the repipe is a repair?

Perhaps splitting the total cost into 1/3 and 2/3 with 1/3 fully expensed this year and 2/3 spread out over 27.5.  The 1/3 cost however will be above the di-minimus $2500 amount so I want to make sure it's reasonable.

Thanks! 

[M-MTax]

Is there a reasonable method for expensing more this year since the repipe is a repair?

If you consider the repipe to be a repair then the entire expense is immediately deductible.

[JotikaT2]

Please see this link as well for additional support.  

In addition to what M-MTax mentioned, if the costs to repipe increased the life of the asset or added value to the rental property, then you should consider capitalizing it and depreciating the cost over time.   

@EricBBL 

[EricBBL]

The repipe (plumbing work) has been thankfully completed today.  The patching work will be next week and the total cost is $36k for 3 units.  

One of the units was unusable due to the slab pipe issue so I'm thinking of counting $12k as a repair.

Then depreciate $24k which is the repipe of the other 2 units over 27.5 years.

Would this be reasonable in the eyes of the IRS?

Thanks!

[Opus 17]

A repair restores the property to as-is or as-was condition.  An improvement adds value to the property or extends the useful life of the property or system.  Consider if a tree limb falls and puts a hole in your roof.  If you patch the hole, it's a repair.  If you take the opportunity to replace the whole roof (extending the functional lifespan of the roofing system) then it is an improvement, despite the fact that the original need might have been a repair.  The same logic would apply to a fence, hot water heater, or other property system.

Do you have photos?  Can you show that the scope of the work is different for different units?    It seems unlikely that exactly 1/3 of the the cost would be a repair, if "repair" is a fair assessment of the work.  Without a more thorough description, it sounds to me like the entire job was an improvement, and you are really just looking for an excuse to call it a repair.  What matters is what you can prove to the IRS.    No one here will stand behind you if you are audited.  If you want a formal opinion, pay an accountant who will defend you if you are audited.  

[M-MTax]

Would this be reasonable in the eyes of the IRS?

No one tell you for sure if your plan to deduct and depreciate would be reasonable 'in the eyes of the IRS'......not even a tax pro and most of them would suggest a more conservative approach or else they would NOT be willing to defend you in an audit.