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March 30, 2025
Question

Water leak repair and bill

  • March 30, 2025
  • 1 reply
  • 0 views

On my rental, I had a water leak due to a busted pipe under the slab foundation below the bathroom floor. To repair the leak, the bathroom floor would need to be drilled through. The cost of fixing and restoring the bathroom floor was pretty close to re-piping the entire house through the attic. I chose the latter since the pipes under the slab were old and there was no guarantee there wouldn't be more leaks elsewhere.

 

Can I categorize some or all of the cost of the  repipe as "repairs" instead of "improvement" since the cost to repair would have been pretty close to repipe.

 

Also, my tenant had a water bill of ~$10000 due to the water leak which I covered thru a payment arrangement with the water company. I paid monthly installments of $750 thru end of 2024 and continuing into 2025. Can I expense the monthly payments under the utilities paid by the landlord? The tenant continued paying the monthly water bill that was not a part of this payment arrangement.  

1 reply

March 31, 2025

Unfortunately the repiping is an asset.  Yes, it cost the same as the repair but has added value to the property in a way that a repair would not have.  It needs to be depreciated as an asset.

 

On the upside the inflated water bills are absolutely a rental deduction.  

 

@arm95051 

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