Sunnyvale, CA · Member since 2013 · 5 posts · 1 vote
Hi all,
This is my first post to this forum (I've been mostly a lurker)!
Apologies if this is the wrong sub-forum - please move if needed?
I own a small townhome in the SF Bay Area, in which I rent out 2 rooms. Today my water heater sprung a big leak. I called my plumber and after examining it, he went out and bought the replacement water heater and replaced the old unit. I wrote him a check and that was that. I did not get a chance to see his receipt for the parts purchased. =(
Based on reading other threads on water heater replacement, I understand that a new water heater is to be depreciated along with the rest of the unit (although how I'm not entirely sure). However, I don't know what the cost of the replacement water heater is or the division between the parts costs and the labor costs.
How am I to / should I be treating this when I file taxes next year?
Based on reading other threads on water heater replacement, I understand that a new water heater is to be depreciated along with the rest of the unit (although how I'm not entirely sure). However, I don't know what the cost of the replacement water heater is or the division between the parts costs and the labor costs.
How am I to / should I be treating this when I file taxes next year?
Thank you!
You add the water heater to your schedule of depreciable assets and depreciate the water heater as a separate asset on its own 27.5 year schedule. Your accountant will know how to do this. If you do your own taxes, your tax preparation software should be able to deal with this easily enough.
This is my first post to this forum (I've been mostly a lurker)!
Apologies if this is the wrong sub-forum - please move if needed?
I own a small townhome in the SF Bay Area, in which I rent out 2 rooms. Today my water heater sprung a big leak. I called my plumber and after examining it, he went out and bought the replacement water heater and replaced the old unit. I wrote him a check and that was that. I did not get a chance to see his receipt for the parts purchased. =(
Based on reading other threads on water heater replacement, I understand that a new water heater is to be depreciated along with the rest of the unit (although how I'm not entirely sure). However, I don't know what the cost of the replacement water heater is or the division between the parts costs and the labor costs.
How am I to / should I be treating this when I file taxes next year?
Thank you!
Andrew,
When you paid him your cost included the water heater. You simply will include what you paid him when you depreciate the water heater and install cost. Parts and labor are depreciated together.
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
Thanks for the tip! I thought I would take labor directly to this year's..!!
Also, you may want to check:
1) Any way your HOA dues cover water heater units? (townhomes vary greatly on what HOA covers..)
2) Do you have a "home warranty" plan from a recent purchase? or otherwise? That might cover it..
3) Also, some cities/counties offer rebates for energy-saving water heater upgrades. Check your local utility/govt website in the South Bay or search google.
Sunnyvale, CA · Member since 2013 · 5 posts · 1 vote
12y
Awesome - thank you for the insights! I will have to check into the HOA and what they cover in terms of "large" replacements like this - thanks for the tip!
Investor · ABQ, NM · Member since 2013 · 28 posts · 6 votes
12y
@ Andrew Wu - Usually when you have a plumber hiding costs or doesn't give you an invoice many times they charge a ton for the replacement. Do you mind telling us the price he charged you for the water heater with labor? Condo size my guess is the water heater was a 50 gallon unit?
@ Andrew Wu - Usually when you have a plumber hiding costs or doesn't give you an invoice many times they charge a ton for the replacement. Do you mind telling us the price he charged you for the water heater with labor? Condo size my guess is the water heater was a 50 gallon unit?
Apologies for the late reply - this replacement was on the expensive side - the plumber called it an "emergency repair" as it was leaking from the top of the unit (enough to have spilled out onto the floor below). The water heater in my condo is located outside in its own partition, which is why it took me a while to notice the leak ...
He charged me $1100 in total (I'm in the SF Bay Area in the south bay) and installed a 40-gallon natural gas Bradford-White unit. (I'd read elsewhere that Bradford-Whites were available to plumbing contractors only (that is the general public couldn't purchase one directly?) ...).
Previous unit was an A.O. Smith 40-gallon tank that lasted 18 years.
Yes going forward I'd prefer to be able to purchase a new heater on my own first and then pay the plumber to install it ... are there recommended guidelines for preventative replacement (vs emergency replacement)?
Based on reading other threads on water heater replacement, I understand that a new water heater is to be depreciated along with the rest of the unit (although how I'm not entirely sure). However, I don't know what the cost of the replacement water heater is or the division between the parts costs and the labor costs.
How am I to / should I be treating this when I file taxes next year?
Thank you!
You add the water heater to your schedule of depreciable assets and depreciate the water heater as a separate asset on its own 27.5 year schedule. Your accountant will know how to do this. If you do your own taxes, your tax preparation software should be able to deal with this easily enough.