Tax Deductions and Depreciation from a Rehab

[Justin Wilson]

Hello,

This past year, I completed rehabs of two of my rentals.  One rehab was strictly cosmetic, the other was cosmetic and a partial chimney rebuild.  What are the IRS rules for claiming tax deductions related to rehabs?  What would the IRS consider improvements that must be depreciated?  Also, what deduction or loss limits apply to a rehab?  For instance, could I consider the cost of a $15,000 cosmetic rehab and expense and deduct it from revenues or would it be considered an improvement that I would have to depreciate separately from the building?  Any help is appreciated.

Thanks,

Justin