Operating Expenses vs. Capital Expenditures

[Rebecca Shine]

I have a couple questions around bookkeeping and taxes for rental properties.  I recently had some work done in the basement of one of my multi family properties that amounted to $4300.  It was really needed because whenever it pours outside, water would flow through the wall and run to the drain in the basement, so I had a french drain installed and the walls sealed.  It's very tempting to just write that off as an operating expense on my taxes for next year, however I'm also still having conversations with banks about future deals, and they also look at income vs. expenses and from an accounting standpoint, I'm thinking that writing off a portion of the taxes using straight line depreciation over a certain number of years would financially look like a more stable and profitable business rather than writing it all off in the year that it happened.  

Can this classify as a capital expenditure rather than an operating expense?

How do I estimate how long the useful life is of the 'asset'?

Am I thinking about this correctly - what have others done in this situation?

Any advice is much appreciated!! Thank you!

[Thomas Castelli]

@Rebecca Shine

Based on the information you have provided, the french drain would be considered a land improvement which must be depreciated over 15 years. 

While the wall sealing would be considered structural, and will need to be depreciated over 27.5 years.