Accounting and tax for real estate investors

[Andrey Feygin]

Hey guys! My name is Andrey and I am from Saint Louis, Missouri. I am accountant by trade and also very interested in learning about real estate investing. I would like to get involved in helping real estate investors and other professionals with their accounting and tax needs. Please let me know if you have any questions related to those areas and I will try my best to answer them!

[Drew Kimminau]

Hi Lisa, IRS states "(what you) Do not add to your basis costs you can deduct as current expenses. For example, amounts paid for incidental repairs or maintenance that are deductible as business expenses cannot be added to basis". As this shows any repair that is not major is simply a business expense. This would include painting and maintenance. However, when you say utilities if you mean new stoves or fridges they will have their own depreciation schedule which you can find online. See below for some examples of capital improvements vs repairs. Let me know if this answers your questions. 

Capital	Repair
Improvements that "put" property in a better operating condition	Improvements that "keep" property in efficient operating condition
Restores the property to a "like new" condition	Restores the property to its previous condition
Addition of new or replacement components or material sub-components to property	Protects the underlying property through routine maintenance
Addition of upgrades or modifications to property	Incidental Repair to property
Enhances the value of the property in the nature of a betterment
Extends the useful life of the property
Improves the efficiency of the property
Improves the quality of the property
Increases the strength of the property
Increases the capacity of the property
Ameliorates a material condition or defec
Adapts the property to a new use
Plan of Rehabilitation Doctrine