New fence replacement on rental property is deductible or depreciation

Forum|Forum|1 year ago
September 10, 2024
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Hi,

I own a single family rental property. Last year, a heavy storm blew out my fence and we had to replace with a new which costed $4200 in total (labor and material). Can I deduct this expense in the same year or I have to do a depreciation? if depreciation, how many years do I need to use?

Thanks,

Jane

Bsch4477

Employee

It’s a capital improvement depreciated over 15 years.

bdang009Author

Could you please explain why I can not classify it as a repair? It was to replace an existing damage fence due to a storm. It was not an improvement to add any additional value to the property so why it becomes capitalized? If it is classified as a repair, I can write off in the single year. Thanks!

Bsch4477

Employee

These are the considerations for the difference between repair and capital improvement. Use your judgment to decide what fits in your situation. A capital improvement is a durable upgrade, adaptation, or enhancement of a property that increases its value, often involving a structural change or restoration.

A capital improvement restores the property to a "like new" condition