Concrete work - expense or improvement?

[Lucas Hammer]

So I'm in the process of having a bunch of concrete repaired and some of it replaced. It doesn't add value and is just fixing/replacing cracked spots in an existing retaining wall and some stairs, so I guess I'm trying to prepare and figure out what line these expenses would go on. I've read a ton of guidelines but haven't figured out on this item where it lands.

[John Teachout]

If you're repairing or replacing concrete that was already there, it's a repair.

[Ashish Acharya]

Originally posted by @Lucas Hammer:

So I'm in the process of having a bunch of concrete repaired and some of it replaced. It doesn't add value and is just fixing/replacing cracked spots in an existing retaining wall and some stairs, so I guess I'm trying to prepare and figure out what line these expenses would go on. I've read a ton of guidelines but haven't figured out on this item where it lands.

Need more info. amount?  on what property? Already in service? Basis of the building? Any other repair and improvements already done to this property? Did you take 20% deduction last year? If so were you limited by basis of the asset on the 20% deduction? 

[Lucas Hammer]

@Ashish Acharya around 14k. Total basis of property is 170ish but I'm living in one unit. This is a common entry so I can only deduct half until I place it in service. I haven't deducted any of the work yet since it's in progress.

[Lucas Hammer]

To be clear, the other unit is rented. My half just isn't in service.

[Natalie Kolodij]

Cement is going to be a land improvement with a life of 15 years. 

So while it should be capitalized (the 50% business half) it has a life of less than 20 years which means you can utilize 100% bonus depreciation on it and deduct it all in 1 year. 

[Lucas Hammer]

@Natalie Kolodij Thanks, so I'm sure I've got it, I can still depreciate the half for the rental, but since it's depreciation, it'll add to my basis if I sell for depreciation recapture?

[Natalie Kolodij]

Originally posted by @Lucas Hammer:

@Natalie Kolodij Thanks, so I'm sure I've got it, I can still depreciate the half for the rental, but since it's depreciation, it'll add to my basis if I sell for depreciation recapture?

 Correct.