A few planks or tiles on the floor. Replacement of broken or worn parts with comparable parts. Whenever you repair or replace something in a rental unit or building, you must decide if the expense is a repair or improvement for tax purposes. Why is it important? Because you can deduct the cost of a repair in a single year, while you have to depreciate improvements over a period of up to 27.5 years.
Repairs are any work done to repair damage and deterioration. The purpose of any repair is to restore the property to the condition it was in before the damage occurred. Following our HVAC example, calling a service company to fix a damaged line in an air conditioning condenser is a repair.
