Are earthquake retrofit expenses for a single family home deductible in the year paid, or capitalized and depreciated?

Forum|Forum|6 years ago
June 1, 2019
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Best answer by Hal_Al

If it is your residence, it is not deductible. It is also not depreciated . The cost is added to your cost basis, for when the property is sold in the future.

If it's a house you rent out, the cost is depreciated, not expensed (deducted). But there are two exceptions:

1. If the total cost was less than $2500

2. the cost plus all your other expenses, for the year, was less than $10,000 and less than 2% of the depreciable basis of the existing structure.

Reference: https://www.biggerpockets.com/blogs/6032/41669-understanding-the-safe-harbor-rules-and-keeping-money...

bwa

Employee

Are you asking about federal or CA taxes?

QUEST5Author

Employee

Both

Hal_AlAnswer

Employee

If it is your residence, it is not deductible. It is also not depreciated . The cost is added to your cost basis, for when the property is sold in the future.

If it's a house you rent out, the cost is depreciated, not expensed (deducted). But there are two exceptions:

1. If the total cost was less than $2500

2. the cost plus all your other expenses, for the year, was less than $10,000 and less than 2% of the depreciable basis of the existing structure.

Reference: https://www.biggerpockets.com/blogs/6032/41669-understanding-the-safe-harbor-rules-and-keeping-money...