Is replacing a bad hot water heater considered an asset or repair?

[jancoleen]

The Hot water heater went out and had to be replaced.

[Hi Palms]

It's an asset but you can use the de minimis safe harbor election to write the whole thing off if the cost was $2500 or less per IRS.

IRS LINK 

[DavidD66]

Under the IRS Final Tangible Property Regulations my opinion is that the replacement of a water heater is a repair.  You can always use the de minimus safe harbor anyway.  You have to use the safe harbor, you have to make the elections and submit it with your tax return.  You make the election in the rental section of TurboTax. 

[Hi Palms]

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@DavidD66 wrote:

Under the IRS Final Tangible Property Regulations my opinion is that the replacement of a water heater is a repair.

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Your opinion but not the opinion of the IRS apparently:

https://www.irs.gov/pub/irs-prior/p527--2025.pdf