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March 17, 2025
Question

Depreciation of new cabinets and flooring in rental property

  • March 17, 2025
  • 1 reply
  • 0 views

I replaced both laundry and garage cabinets as well as replaced carpeting with vinyl flooring in the bedrooms of a rental property.  In both cases, the cost of the cabinets and the cost of the flooring were over $2500 each.

I purchased the material myself and then hired separate contractors to perform the installation labor. The labor in both cases cost less than $2500 each and I paid the labor separately from the materials at different times.

I also purchased accessories which were minor in cost and purchased at various stores. The accessories included cabinet knobs/handles for the laundry/garage project and underlayment and shoe molding for the bedroom project.

 

My question is do I only include the material cost for the cabinets and flooring (over $2500 each) to be depreciated? or do I add the installation labor cost to this material cost and depreciate the total of both for the cabinets and the flooring?

How do I handle the accessories? Can I expense those costs which are minimal? or do I need to add those costs to the cabinet and flooring material costs and depreciate all material costs added together?

 

To be clear, I will add the cabinets as a separate asset from the flooring. My questions are aimed around what costs to include or not include for each asset.

 

Final question, what asset classification do the cabinets and flooring get and what should the depreciation duration be?

    1 reply

    KrisD15
    March 17, 2025

    Enter ALL the costs for each project, so the cabinets, knobs and installation for new cabinets and flooring and labor for floor coverings. 

     

    You will enter the additional assets under the rental.

    (go to the rental section,   Yes, review your information profile, answer the question that follows about being a real estate professional, select EDIT for the property from the list, , scroll down to 

    Assets/Depreciation

    Select Rental Real Estate Property

    Select "Appliances, carpet, furniture"

     

     

    The program will plug-in the recovery period, and in your case they will both be five years. 

     

    IRS Pub 527

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