What to do about Taxes

[Jarrett Harris]

I'm not really sure which forum this should be in. But my question is, how do tax write offs work as far as repairs and upgrades are concerned? I have read and heard some people say any repair and/or upgrade you perform is tax deductible. However I called the Tax accountant that normally does my annual taxes and she said that you can only deduct things deemed as upgrades. For example.....Fixing a furnace is a repair (not deductible) but replacing the furnace is an upgrade (is deductible). What does the law say concerning this? Thanks.

[Frank M.]

It's time for a new accountant.

For a rental property, repairs are all an expense, deductible that year. Things like a new appliance, furnace, etc are depreciated. The instructions for schedule E should help clarify what's 'repair' and what's an 'upgrade'. Most items are one or the other with little grey area.