Water Heater Replacement - To Sect 179 or not...

[Jennifer Bott]

We replaced a hot water heater that stopped working for our tenant.  The cost of tank and labor amounted to $800.  From the research I did, it's pretty clear it has to be depreciated over 27.5 years as structural improvement rather than expensed.  I am now trying to determine whether I can Sect 179 it or not, and if so, what the disadvantages would be. It's easy to see the advantage of taking the full amount in the first year.  My questions specifically are as follows:

1. Does the tank qualify for Sect 179?  What are main disadvantages to using Sect 179?

2. If it qualifies and I elect this and take the full amount in year 1, if the asset breaks 5 years from now, I'm not clear on what the recapture laws would require me to do.

3. If I elect to depreciate regularly over 27.5 years, and it breaks in year 5, and has to be replaced, old tank having no resell value, then I would get whatever has not yet been depreciated, as a deduction in the year of disposal...?

4. For both 179 election and regular depreciation, I would be able to add the cost to the basis of the rental property?  I have been running a basis calculation and want to confirm in both cases I can add this in.