Shower Repair/Improvement While Renting Part of Home

[Farabi]

Hello,

I started renting 30% of my home on 1/1/2022. On 2/9/22, I had a major shower leak in the master bedroom that I occupied at the time. It leaked into the downstairs common areas (living, dining rooms and kitchen) thus affecting my tenant.

I spent a total of $6,500 on the shower repair which entailed demoing tile, installing a new shower pan, replacing rotted subfloor and joist and retiling. The breakdown was $2000 in materials, $1000 for a Plumber, $500 for a Carpenter, and $3000 for a Tiler.

I moved out of the home on 11/20/22 and started renting the whole property.

Would I depreciate the shower repair? Or can I expense or use the Bonus Depreciation for any of the costs?
How would my usage of the new shower and renting part of my home affect the cost of the shower I can expense or depreciate?

[HopeS]

The shower repairs totally relate to the personal part of your home and not the business portion. None of the expenses were directly related to the rental portion. Therefore, none of the costs can be depreciated or expensed,   In addition, please be aware that without a cost segregation study, you cannot take a bonus deduction on a rental property,

Below is other helpful information:

Rental Real Estate and Taxes

@Farabi 

[Farabi]

@HopeS Thank you for your response. So, considering that I moved out in November 2022 and put that bedroom & bathroom with the shower repair into service in December 2022, would I then add the cost of the shower repair to the cost basis of the bedroom?

[AbrahamT]

Yes, you can do one of 3 things;

1- Add it to the cost basis of the home in December of 22 and depreciate it as part of the total cost of the home going forward.

2- Bonus depreciation usually applies to capital improvements to the property. In your case, however, it sounds more like repairs as this was being done to restore the shower back to it's original condition. Either way, you can deduct the entire amount. You may treat is as a capital improvement and take bonus depreciation for the whole amount. You may also consider it repairs and take the whole amount as an expense in 2022 which is the year you incurred it. If I were you, that's how I go, expense the whole amount as repairs and maintenance.