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Updated about 8 years ago,

User Stats

203
Posts
139
Votes
Jens Nielsen
  • Investor
  • Santa Fe, NM
139
Votes |
203
Posts

Rehab of 2 out of 4 units -add to basis or deduct as repairs

Jens Nielsen
  • Investor
  • Santa Fe, NM
Posted

I purchased a 4-plex in 2016. Two of the 4 units were empty, so we did some repairs on those units (new carpet, tile and paint), plus we installed a new roof, repaired an exterior wall and fixed potholes in the parking lot.

I know that repairs that are done before the property is put into service should be added to the cost basis. However, the building was partially in service, so can I deduct the repairs to the two empty units, or should that be added to the basis? 

The other repairs to the building I would assume are deductible as they covered the entire building. The roof however I guess has to be added to the basis?

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