Sewer liner - depreciation or expense ??

Question

Hello everyone,

For starters I already know that I need to talk with my CPA. But he's on vacation for the week and I'm curious.

I have a rental that has been having issues with clogged main sewer line. So I send someone out to snake it and 3 or 4 months later it's backing up again. So I called a different company to come out and give me their assessment. They tried to camera the line but it had too much water in it to see clearly. They recommended to try hydro jetting as thr augers clearly weren't getting everything. So they did the jetting and then came back with a camera to see what really going on. There are 3 different type of pipe, pvc, cement and clay. And I have roots, big roots growing into the clay pipe that will fail at some point. Oh, this area is under the paved road. Great....  So the best option is an epoxy liner.

Know to the question, is the liner something that I can expense or does it have to be depreciated? And if depreciated, 5, 10 or 27.5 years?

Thanks for your help

John Clark · Answer

Thank you @Michael McDevitt.  I was hoping that it would be considered a repair as this is solving a problem.

Good point @Mike McCarthy, I should find out what are the risks and if something goes wrong, how is it handled ad who pays for it.

Michael McDevitt · Answer

It is an improvement to the propoerty, so it should be depreciated, over 27.5 years.

Jeff B. · Answer

BTW:  a forth type of lateral sewer lines is called "Orangeburg".  The construction method was to roll tar paper & pitch.  As noted in the wiki cited, it fails easily and the only real solution is total replacement - - all the way to the city main.  That was 7k for 120ft back in 1999.

re epoxy liners:  IMO that's a solution for internal galvanized plumbing that has rusted and is staining the sinks & tubs.  Be sure to understand the product warrantee (ie expected lifetime).