All Forum Posts by: Mitch Genser

Steve and Will - thanks very much for you input and support. No easy answers here. Going with O & M ordinary expenses for bed bugs and due to the pre-existing condition of the mold, my accountant and I feel that there is sufficient authority to treat the remediation as a cap ex ('betterment', returning property to it's previous condition, etc.). Much obliged!

Thanks for your input. Just skimmed IRS Letter Ruling. Our mold was present (apparently well hidden, alas) when we bought the building - thus that would change tthe fact scenario IRS was looking at. Sure would love to find an IRS letter on bed bugs. But you are probably right. Ordinary expense, albeit at times extreme.

I am getting some mixed messages about how to deal with the accounting for bed bug remediation in an apartment building my company owns. Normal, regular and modest 'pest management' is clearly part and parcel of 'operating expenses' under Pest Management under O & M expenses. But what about the 'heat treatments' and chemical treatments (less expensive than heat!) that can run from a few hundred dollars to low $1,000's for a crazy bad situation requiring heat. Should these be treated as 'cap ex' as one colleague has suggested (he says HUD so categorizes as such but I have yet to see the documentation) or merely part of ordinary operating expenses? Clearly, mold remediation is a cap ex account since it falls under the 'betterment' and improvement of the building, etc. But what about the $7,500 of beg bug expenses we have laid out this year? I am researching some alleged insurance companies who say they have 'bed bug' coverate - separately written. Anybody know anything about that? But first - the cap ex discussion please. Thanks for your help!