Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago, 05/03/2017

User Stats

946
Posts
153
Votes
Mark Forest
  • Real Estate Investor
  • Fenton, MI
153
Votes |
946
Posts

Capitalize or expense

Mark Forest
  • Real Estate Investor
  • Fenton, MI
Posted

I have brought this up on other boards, but I still am not sure of the answer. I am a landlord who has acquired some fix up properties which I will lease to tenants. I have not yet made any of the houses rent ready. The fix up procedure has gone on for three months. Do I capitalize these fix up costs or can I expense them? I think the new roof and furnace are capital improvements, but what about paint, drywall, electric outlets, PEX pipe repairs, and step repairs? I have heard from some sources that ANY expenses to get the house to rental condition must be capitalized.

Secondly in my state of Michigan property taxes are prepaid, and at closing the purchaser (me) reimburses the seller for the portion of the property taxes applicable from the closing date forward. Do I capitalize these or are they expensed?

Thank you for your answers. I want to start allocating these expenses properly now.

Loading replies...