is an airconditioner for a rental unit a permanent capital improvement?

Forum|Forum|2 years ago
February 27, 2024
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I purchased a new air conditioner condenser (the outside unit) for my rental property. I also had to replace the blower and heat exchange coils in the house. Total cost was about $17K. Is this considered a permanent capital improvement? Is it an expense for 2023 or do I have to depreciate it? This is a beach rental so the outside condenser does not last 27.5 years. Is there a difference between the inside and outside components; do I treat them separately? I realize variations of this topic have been addressed by this community before, but I still confused.

TomK2023

The air conditioner (and all of its components - inside and outside) are considered as one unit. It is a capital improvement that must be depreciated over 27.5 years.

IRS Pub. 527 - Residential Rental Property

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