How to evaluate expense vs. improvement?

[Maria G.]

Hello,

I have been reading about it, but sometimes I find there is a blurry line between one and the other and, in those cases, I would like to know what is better, so that I can choose accordingly. I know that "better" can vary depending on the circumstances, so I would like to know what to consider to make that call.

Here's an example: exterior painting. According to the IRS site, it is generally an expense, unless it's part of an improvement project, but how can you tell? You may choose to make your improvement project be precisely that--making the exterior of your rental nicer. In that sense wouldn't that count as improvement? 

And that brings me to the main question: Is it really better to mark something as "improvement" instead of "expense"?

The considerations that come to mind are that I would expense something if I want to add deductions to lower my AGI and that I would use the improvement if my rental went up in value, so that I can raise its base, but I am sure those two are very rudimentary and there are better ones, so if you have more sophisticated ones, I'd love to hear them.
Thank you.

[Michael Plaks]

Quote from @Maria G.:

Hello,

I have been reading about it, but sometimes I find there is a blurry line between one and the other 

Answering your question would take an all-day class, if not longer, and it will still not cover all possible twists. Maybe this link can illustrate why it is so confusing: https://www.irs.gov/businesses...