Repair/improvement and Safe Harbor rules

Repair/improvement and Safe Harbor rules

Investor · Maryland Heights, MO · Member since 2016 · 55 posts · 36 votes

Newish landlord here.  I have a couple items that need fixing at a property I'm managing myself and I'm wondering about the tax implications since they are higher ticket items.

Item #1:  The driveway

I got cited for a city violation as the driveway has a tripping hazard.  One of the slabs cracked/sank and there is a 1-2 inch drop off.  I got bids to replace just the one slab ($1800) or the whole thing ($2800).


Item #2:  Garage Door

The garage door opener has been causing fits and needs to be replaced.  It's ancient.  But, the door is old too so I would like to replace both.  I haven't gotten estimates for these but imagine it can replace both for $1000-2000.


I've read about this $2500 and safe harbor limits but would like details as to how that applies to my two scenarios.  If I can deduct all in one year, obviously that is beneficial.  Is it legit to separate things out to get under the $2500 amount?  Is the $2500 per item?  Is there a limit to amount of items per year?  For instance, if I wanted to replace all the windows in a house...I imagine that's going to cost more than $2500.  But, what if I just did a few at a time?  Any information would be much appreciated.

1Reply
43 views

Most Popular Reply

Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
5y
Originally posted by @Dan Schwartz:

@Michael Plaks to clarify when you say the driveway repair can be written off immediately: are you referring to only the $1800 repair option, or would it also apply to the $2800 option if the invoice items are each below $2500 (e.g. separating out materials, labor, etc.)?  Thanks.

The entire $2,800 driveway can be written off using 100% bonus depreciation. It has nothing to do with the $2,500 de minimis. Depreciation is complicated.

See this reply in the discussion

5 Replies

Jump to latestLatest
  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    5y

    @Brandon Heimsoth

    In your first two examples, you indeed can write off the driveway repair and the garage door repair immediately.

    You cannot stretch it the way you want to. It would not apply to windows. Also, you cannot take a $10k project and break it into four $2,500 sub-projects. Details are too complicated to explain in an online post.

  • Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
    5y

    @Michael Plaks to clarify when you say the driveway repair can be written off immediately: are you referring to only the $1800 repair option, or would it also apply to the $2800 option if the invoice items are each below $2500 (e.g. separating out materials, labor, etc.)?  Thanks.

  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    5y
    Originally posted by @Dan Schwartz:

    @Michael Plaks to clarify when you say the driveway repair can be written off immediately: are you referring to only the $1800 repair option, or would it also apply to the $2800 option if the invoice items are each below $2500 (e.g. separating out materials, labor, etc.)?  Thanks.

    The entire $2,800 driveway can be written off using 100% bonus depreciation. It has nothing to do with the $2,500 de minimis. Depreciation is complicated.

  • Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
    5y

    @Michael Plaks thank you for clarifying

  • Investor · Maryland Heights, MO · Member since 2016 · 55 posts · 36 votes
    5y

    @Michael Plaks Thank you for the clarification.  I honestly wasn't expecting that the full $2800 replacement could written off in one year.  Taxes sure are fascinating...I truly mean that.  Thank you!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.