New AC Tax Deductible

10 Replies

Hello,

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.

Promotion
Innago
Property Management Software
Manage Your Rentals Better For Free. Save Time & Money.
Easily Collect Rent, Screen Tenants, Sign Leases, List Properties, Manage Work Orders, & Much More!
100% Free Try It Now

@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.