I am pretty new to BP and I am doing my best to study as much as I can to get ready to invest in the near future. I currently own and live in a condo in Los Angeles, Sherman Oaks specifically, and it looks like I may need to buy a new AC unit soon.
I was just wondering if a new AC unit would be considered a home improvement and be considered tax deductible? I also saw that some AC units actually get tax incentives and refunds.
If anybody has any recent experience with this, I would greatly appreciate any advice. Especially any HVAC companies/contractors you've worked with in the past?
Thanks in advance!
@Brandon Hall could provide you with definitive answer, but I suspect things are not that much different for you than us.
If we are talking portable/window AC unit, then you could probably expense it - I would in Canada, particularly if it were only a few hundred dollars.
If you are talking central air or a mini-split unit which is fixed to the house, then it is a capital improvement and you will need to add it to your cost bases and depreciate it over time.
Thanks @Roy N. I appreciate that. I am talking about a central AC.
@Pablo Pinasco since its for your primary residence, you won't deduct it or depreciate it. You could look at qualifying for the energy credit though.
Thanks Brandon ... I skimmed over the fact it was his primary residence.
Things are still the same in Canada ... if its your residence, there are no deductions.
Thanks @Brandon Hall I am looking into the energy credit. I appreciate the advice!
@Pablo Pinasco it does however get added to your cost basis in the property should you sell at some point. This matters in case you are going to exceed the $250/$500k capital gains tax exemption on sales of primary residence in which you've resided for at least 2 of the last 5 years.
@Pablo Pinasco I am accreditation EnergyUpgradeCA contractor, however, I don't know or haven't used that part of my accreditation before. If only central AC, I don't think it's worth it, if you are changing something else, yeah. Each house wualifies for 6k of energy incentive.
@Manolo D. you have any additional information regarding the 6k energy credit or a link to that information?
@Pablo Pinasco Ok each house is qualified for two $3000 rebate. http://tenres.com/home-upgrade-2/There you go.
Thanks Manolo for the link, I looked into it further and it looks like I will be eligible for $100/ton in rebates as long as the unit exceeds 15SEER.