How to calculate deduction from deposit for carpet when installing vinyl to replace

[Cristin Andrews]

Hi. My renters absolutely destroyed beyond regular wear and tear (playdoh ground into carpet and dog stains and rips) the carpet that I had installed in the unit just before they moved in. They were there 3 years. I will need to replace the carpet in the entire upstairs (downstairs is tiled) and I would like to install vinyl instead upstairs. If I do this - can anyone advise how I would itemize/document/calculate the cost to the renter for the carpet replacement for the purposes of justifying the deduction from their deposit? 

[Michael Peters]

Carpet has a 5 or 9 year depreciation depending on your tax strategy.  The Department of Housing and Urban Development uses the 7 year guideline which is what we use.  I also include a general rule of 3 turnovers typically means new carpets should be expected.  With great tenants you can absolutely get carpet that lasts longer.

Have your installer to bid both carpet and vinyl.  Prorate the cost to replace just the carpet.  Using the 7 year rule the tenants would be responsible for ~57% of the replacement cost.

Here is a link to the IRS publication.  You can find the depreciation scale on page 9.  
https://www.irs.gov/pub/irs-pd...