Question

Rental property renovations between tenants

Forum|Forum|4 years ago
January 24, 2022
2 replies
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Hello,

I had a tenant move out of my rental property at the end of January 2021. The apartment was ready to rent but I decided to make some renovations (replaced windows, the entrance door, paint) in order to get more rental income. This, of course, means that during renovations, the apartment was not "available" to rent. The entire renovation was less than $2500. The next tenant moved in July 1st, 2021.

Am I allowed to deduct those expenses? If so, can I deduct those expenses as part of the Safe Harbor? Do they go as improvement?

Thank you,

Mat

Not A Product Question

Carl11_2

Employee

Am I allowed to deduct those expenses?

No, not as a deductible rental expense.

If so, can I deduct those expenses as part of the Safe Harbor?

No, because there's no doubt those improvements are "a permanent and physical part of" the structure. So cost doesn't matter.

Do they go as improvement?

They must be entered as a property improvement in the Assets/Depreciation section. They get classified as Residential Rental Real Estate and depreciated over the next 27.5 years. Depreciation starts on the date the work was completed, as that will be the "in service" date.

R

RobertB4444

If what renovations you did count as repairs and maintenance on the house (just getting it all back in shape) then it is 100% deductible this year.

If what you did qualifies as improvements - changing things to make them better - then it needs to be deducted or depreciated over time.

Here is a link to the IRS guidance about rental real estate.

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Carl11_2

Employee

(replaced windows, the entrance door)

Hand's down a property improvement that gets depreciated

paint

Painting is a maintenance expense and can be claimed as such. However, if the only thing painted was the new windows and door, then that cost is actually "a part of" the property improvements. I doubt you only painted the new windows and doors though. Therefore the painting can be expensed.... and should be.