Question

rental condo special assessment

Forum|Forum|5 years ago
February 8, 2021
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We have a condo rental property and paid a special assessment in 2020. The condo is 20 years old and assessment covered things like re-coating parking area floors, re-coating the roof, painting garage area and replacing tile in common areas. Can it be expensed?

Not A Product Question

WendyN2

If the assessment is for an expense or repairs and maintenance, you can deduct the special assessment on your rental property as a rental expense. If you assessment is for an improvement (such as a new roof on a condominium), then you have to capitalize and depreciate it accordingly as it qualifies as a full-fledged improvement and not a recurring annual expense.

If the parking area re-coating was in any way to seal coat cracks from weathering, then this can definitely be expensed depending on your location as this more often than not is an annual recurring expense. Painting of the interior of the garage would depend on what you are doing inside the garage in relation to your business - for example - if chemicals are used that are bubbling up the coating at least annually, then this could also be put on as a direct write-off expense for that year. However, replacement of tiles in common areas, unless specifically stated that you are required to do so, would be considered an immprovement.