New Porch Tax Implications (expense,capital,partial disposition)

[Greg D.]

I just had a new 3 story porch installed on a 4-unit residential building for $18k.  This included the cost of demolition / disposal of the old one and construction / materials of the new one.

1. Can I expense the cost of the demolition and disposal or does this need to be capitalized?

2. Can I take a partial disposition against the building basis that included the old porch?  If so, how do I calculate the value of the old deck?

3. How many years should I be depreciating the new PT wood construction deck over?

[Brandon Hall]

@Greg D. totally see where you are coming from. I also totally see where @Al Wilson is coming from. Hardly anyone on BP knows about the Tangible Property Regs. Those that do (us CPAs) are still trying to figure out how to correctly apply the new regs.

When Al says get a CPA, without trying to sound self-serving, he's providing solid advice. You cannot rely on an article to substantiate a tax position. You can't even rely on the IRS pubs to substantiate a tax position, per prior IRS rulings, even though people tend to utilize the pubs to make decisions. 

I agree that everyone should know, at a high level, tax rules that affect their position, however the Final Tangible Property Regs are quite difficult to completely comprehend. The point Al is trying to make is that people will take this high level information, enter it into TurboTax  and completely butcher their tax position. 

Some people can prepare their own taxes perfectly fine, and I'm sure you're one of them. But for the majority of real estate investors, the tax code is simply too complex and too grey to successfully prepare their own returns and operate tax efficiently.