Asphalt Driveway Overlay for Rental Duplex - Repair or Improvement?

[hooly]

I have owned a rental duplex for a number of years.  The driveway had deteriorated over time, and I got someone to give me an estimate to reseal the asphalt.  I was told it had a few places where is was down to dirt - an therefore seal coating was not an option.  I got a quote to do repairs and put an overlay on the driveway.

The cost was $3900.00.  Is this considered a repair, versus an improvement?

[tagteam · Accepted solution]

If you remove the old driveway and replace it with a new driveway, that would be an improvement.

If you simply fill in a few places with asphalt and re-seal, that would be a repair.

[hooly]

So I have been doing research prior to asking this question.  Which seemed to say if the driveway needed to be dug out and completely redone, this is an improvement.  This was not the case.

And obviously if driveway just needed to be resealed, this would be a repair.

So in this particular case, the driveway was a little beyond just needing sealed, because dirt was showing in one area.  Since there were cracks and weeds, the asphalt company recommended filling all the cracks and removing weeds.  and filling low areas (spots), and then applying an overlay of asphalt over the drive.

Some places I read that this would be considered repair of driveway surface.  

[tagteam]

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@hooly wrote:

....if the driveway needed to be dug out and completely redone, this is an improvement.

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I believe that is correct and if it's not technically an improvement, then it would certainly be considered to be a repair and deductible as an expense for a rental property.