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MMooy2020
Returning Member

Special assessment to replace the pipes behind the sheetrock and the heating and cooling units in the individual condos.

I received a $19,000 special assessment from my condo association for necessary repairs to the HVAC units in each apartment and the pipes behind the walls in the entire 200 plus unit building.  I also replaced the refrigerator and microwave prior to the tenant moving in (it has always been rented) and had to call the plumber to unclog the drain in the unit after the tenant moved in.  I believe that all these expenses are repairs but I am not sure if I lump them together or they need to be reported in different areas.

 

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3 Replies
KrisD15
Expert Alumni

Special assessment to replace the pipes behind the sheetrock and the heating and cooling units in the individual condos.

If the assessment is for REPAIRS, it can be expensed as such. 

If it is for improvements, (NEW HAVAC) it is added as a depreciable asset. 

The drain cleaning is a repair.

The appliances are additional assets. If they were added before the rental was available for rent, the amount is added to the basis (value) of the building. 

If they were added after the rental was available for lease, they would be listed and depreciated separately UNLESS you are able to use bonus depreciation (in which case the entire amount could be written off the year they were put into service. 

 

Repairs may be lumped together, keep individual receipts with your tax file. 

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MMooy2020
Returning Member

Special assessment to replace the pipes behind the sheetrock and the heating and cooling units in the individual condos.

I am a passive investor as I do not spend much time managing the property.  I did not see a section in Turbo Tax for the depreciation.  I had my taxes professionally done in years past and there was depreciation, but it looks like the losses are capped this year at $5000

PatriciaV
Employee Tax Expert

Special assessment to replace the pipes behind the sheetrock and the heating and cooling units in the individual condos.

If you claimed depreciation in prior tax years, you may need to add capital assets to your Schedule E rental property to continue that depreciation. The IRS requires you to take depreciation, even if you aren't able to claim a passive loss.

 

See this article for more info: How do I handle capital improvements and depreciation for my rental?

 

Since reporting rental activity can be complicated, you might consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing.

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