We owned a rental property (that we later sold in the same year) that we had to waterproof the basement. Where do I enter it? Under repair expenses?

Forum|Forum|6 years ago
January 29, 2020
2 replies
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surgerygalore

Alumni - Champ

hello

waterproofing basement may take many different forms

if it was a coat of a product, I would expense it

if it was something more in the direction of an improvement that a repair, then I would depreciate it, this might be particularly useful if you just sold your property

hope this helps!

LeonardS

Alumni - Intuit

How you report the waterproofing depends on the effect it had on your property.

I would be a capital improvement if was the addition of a permanent structural change or the restoration of some aspect of a property that will either enhance the property's overall value, prolongs its useful life, or adapt it to new uses. The value of a capital improvement is added to the basis of your property.

If it does not meet the criteria for being a capital improvement then it would be considered a repair and deducted as an expense.

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