Deck "expense" - repair or improvement?

Deck "expense" - repair or improvement?

Member since 2019 · 1 post · 0 votes

Pulling my hair out on this...I have no idea which to classify this as. Sure I can be safe and treat it as a capital expense, but I don't know if it makes sense to.

We have a small rental property with a huge deck. We replaced the flooring and railing but all of the core structure remained. The cost was just over $6k just because it's so large. The flooring was deteriorating so we replaced it and the railing was also in very poor condition.

Thoughts?

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  • Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Jake Shoupe

    This sounds more like a 'restoration' than a 'repair'.  Either way, $6k is more than the de minimis safe harbor of $2.5k

    Maybe favorable treatment under the small taxpayer safe harbor.  Talk to your tax CPA/EA about that.

    Leaning toward capitalize, but there are other facts left out which affect the decision.

    If the original deck is still being depreciated, there may be an opportunity to take a portion of the remaining adjusted tax basis as a loss.

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