It's one of "those" days today...

[Joe M.]

Well today turned out to be one of 'those' days.

Rental house #1: Furnace breaks down, requires $300 to fix

Rental house #2: Hot water tank sprouts a major leak, needs replaced, $500

New Rental House #3: Discovered a problem during rehab that is going to require an extra $1,500 to fix.

All on the same day......geesh I need a beer :D

[Steve Babiak]

Since rentals #1 and #2 are now "in service", repairs are fully deductible in tax year when paid. Whether the water heater is treated as a repair or improvement (to be depreciated over life of water heater) is something for the CPA / accountant types.

Rehab costs get capitalized on house #3.