Septic Install - Deductions/depreciation

[Joe DeLuca]

Good Morning everyone,

So, here's the scoop, I'll be closing on a triplex (first deal, house hack, Hunterdon Co. NJ) within the next month. We are replacing the old (really old) septic system via a FHA 203K loan after we close. The cost of the system will end up being about $42K-45K, built into the mortgage.

Still trying to understand some of the finer points of House Hacking deductions and depreciation. CPA's, Tax advisors, Landlords and House Hackers are more than welcome to chime in.

Here are the questions: 

• Since there was an existing system (that will be pumped, crushed, and abandoned), would there be a difference (deduction/depreciation-wise) if this is considered and alteration vs an install? I've seen contractors propose these both ways for the same work.
  
  • If it's an alteration, would it be considered a repair??
• I assume i cannot do a straight line deduction the entire system, but can i deduct part of the installation? 
• I've read the system may be considered an improvement on the land, thus maybe deductible over 27.5 years.
• Can any of these strategies be integrated?

Thanks in advance for any and all advice!

[David Cruice]

Who told you that you had to replace the old septic system and why?  I have a lot of experience with such systems.  A lot of septic/drain field companies are, like your septic tank, full of s . . .!