Is foundation repair to a rented property considered land improvement or real estate asset?

[orellana_monica]

I own a duplex (both sides) and rent both sides. I had to do foundation repairs on both sides.  Since the quote was a total without splitting costs by side, I used a factor based on the # of piers to each side to determine how much for each side.  Is this ok? Also, I am assuming this is an improvement.  When asked if  The cost of all repairs, maintenance and improvements is less than or equal to the smallest of these limits: 2% of the unadjusted basis of your building or $10,000, I answer NO.  After this is when I get stuck as I am not sure if foundation repair is considered land improvment or real estate? Please help? THanks.

[IsabellaG · Accepted solution]

The foundation of your building is considered Residential Real Estate, not a land improvement. Examples of land improvements include paved parking areas, driveways, fences, outdoor lighting, etc. The foundation is very much a part of the building.

Your allocation of the cost between the two units seems reasonable, but I am wondering why you aren't reporting your property as a single rental property, since you own both sides and rent both sides.

[writermom3]

I would agree but here's a different perspective. <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3028666-how-to-enter-partially-occupied-duplex-where-one-unit-was-...>