A reader sent the following question …
Dear Sir:
I just finished reading What You Must Know BEFORE Becoming a Greedy Landlord, which is an excellent resource for potential and current
landlords.
My question concerns repairs
versus improvements.
If a repair cannot be made and an item
must be replaced for safety reasons, does that still count as an improvement?
The item in question is a set of
concrete steps that have broken away from the foundation and cannot be
repaired. The steps are dangerous and need to be replaced before we can rent
the house out.
Thank you!
John
***
My answer:
Hi John,
With the tax code,
much depends on how you interpret it.
Here’s what it says
regarding repairs:
“You can deduct the
cost of repairs that you make to your rental property. A repair keeps your
property in good operating condition and does not materially add value to the
property. Examples are painting, fixing leaks and replacing broken doors or
other parts of the rental property.”
So if I were you, I’d
classify your new steps as a repair and deduct the full cost.
Good luck!
George
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