Strategy for new AC install

[Bruce Reeves]

I am planning on selling my duplex rental next year (Jun 2026). The AC systems are 15+ yrs old and hanging by a thread. I may get a new AC installed on both sides, gas furnace is good for now. 

Questions - is this an improvement that will increase my basis upon sale or a repair I can take on my expenses? If I can treat the cost either way, does in matter if I lower my capital gains or take it as an expense off the P&L? Just estimating my marginal tax rate will be 22%.

Thanks for any insight.