Tax treatment of a tenant requested remodel

[Joe Taylor]

Hello everyone,

I'm seeking opinions on the tax treatment of remodeling in certain situations. For example, let's pretend I purchase a house for $90K, misc rehab is $10K, so I'm "all-in" rent-ready at $100K and advertised rent is $1K.  House is move-in ready and tenant would rather have a whirlpool tub and a double vanity, a bathroom redo costing $10K. Tenant intends to stay long-term and would pay an above-market rent.  So a few questions for the CPAs and others out there - 

(1) Being a new purchase would you just add the remodel to your cost basis or separately depreciate?  

(2) Would you take some deduction for the existing components (tub, vanity, etc) that were in good working condition yet were disposed?  Seems like a loss to me.  If so, how and how would you estimate the value?

Any other thoughts and experiences would be appreciated.

Thanks,

Joe