Are renovations in property deductible in addition to deprec?

[Mansi Mehta]

Can you make the repairs like painting, fixing hvac tax deductible in addition to depreciation?

Any good articles on the same?

Thank you

[Bob Norton]

@Mansi Mehta Whether or not you must capitalize rehab expenses depends upon when you place your rental property in service.  Any expenses you incur before your place the property in service as a rental must be capitalized and depreciated over its useful life.  That's 27.5 years for most rehab expenses.  Appliances and other similar equipment have shorter useful lives and may be expensed under Sec 179 for the year they are placed in service.  If your property is available for rent (ie. "in service"), then you must capitalize any rehab expenses greater than $2,500 (per invoice). Some expenses, like painting, can be expensed as maintenance, as long as this expense is invoiced separately.  You should discuss this with your CPA to make sure you are maximizing your deductions under the IRS rules.