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Subject Author Date
Rental Home question lyoncc 08-14-2007
Posted by lyoncc on August 14, 2007, 3:43 am
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 Hi all. I have owned a rental home for many years. I am
planning on installing new windows thru-out the home that
will cost appoximately $9K. Can I deduct the $9K against
the rental income all in one year, or do I have to place the
$9K on the depreciation schedule and deduct it over the 20
years? I am also planning on a new roof next tax year, so I
would have the same question for that.

Thanks in advance!!!!!!

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Posted by Bill on August 14, 2007, 3:57 pm
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 lyoncc@hotmail.com posted:

> Hi all. I have owned a rental home for many
> years. I am planning on installing new
> windows thru-out the home that will cost
> appoximately $9K. Can I deduct the $9K
> against the rental income all in one year, or do
> I have to place the $9K on the depreciation
> schedule and deduct it over the 20 years? I
> am also planning on a new roof next tax year,
> so I would have the same question for that.

Both items you describe are significant improvements, which
should be depreciated over 27.5 years.

However, there are special, shorter depreciation periods
available if your rental property is located in the "Gulf
Opportunity Zone" and under other special conditions. Also,
if the roof were damaged -- as from a weather event -- it
might be considered a repair.

Generally, though, you're looking at 27.5 year-depreciation
whenever you're dealing with a residential rental property
"improvement."

You can read all about it, in Pub 527. It's available
online, in html. I just browsed it briefly, as I was
preparing this response, and here's a link:

http://www.irs.gov/publications/p527/ar02.html

Bill

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Arthur Kamlet on August 14, 2007, 3:57 pm
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> Hi all. I have owned a rental home for many years. I am
> planning on installing new windows thru-out the home that
> will cost appoximately $9K. Can I deduct the $9K against
> the rental income all in one year, or do I have to place the
> $9K on the depreciation schedule and deduct it over the 20
> years? I am also planning on a new roof next tax year, so I
> would have the same question for that.

In each case I'd consider them to be a new asset, with 27.5
year expensing.

--
ArtKamlet at a o l dot c o m Columbus OH K2PZH

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Bernard S on August 23, 2007, 9:48 pm
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>> Hi all. I have owned a rental home for many years. I am
>> planning on installing new windows thru-out the home that
>> will cost appoximately $9K. Can I deduct the $9K against
>> the rental income all in one year, or do I have to place the
>> $9K on the depreciation schedule and deduct it over the 20
>> years? I am also planning on a new roof next tax year, so I
>> would have the same question for that.

> In each case I'd consider them to be a new asset, with 27.5
> year expensing.

What happens to the remaining costs of the old windows and roof?

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Bill on August 24, 2007, 7:29 pm
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berniesa@pacifier.com (Bernard=A0S) posted:

>>> Hi all. I have owned a rental home for many
>>> years. I am planning on installing new
>>> windows thru-out the home that will cost
>>> appoximately $9K. Can I deduct the $9K
>>> against the rental income all in one year, or
>>> do I have to place the $9K on the
>>> depreciation schedule and deduct it over
>>> the 20 years? I am also planning on a new
>>> roof next tax year, so I would have the
>>> same question for that.
>> In each case I'd consider them to be a new
>> asset, with 27.5 year expensing.

> What happens to the remaining costs of the
> old windows and roof?

There is no adequate basis for subtracting them from the
original "total depreciation" established, so they'll just
continue as a part of that -- in addition to the separate
itemization for the _improvement_ cost.

They were, in fact, a part of the cost paid for the total
property -- which was not in any way diminished by the
improvement process.

Bill

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

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