Barbara wrote:

- quote -

Using your definitions. there would be no "Repairs." Even a
relatively small repair will increase the potential sales
price; a buyer will have a price in mind and subtract any
"repairs" that he believes must be made.

Repairs also restore value or useful life. If there had
been no termite damage when the property was acquired, that
$7,200 was merely restoring that value. On the other hand,
if the damage occurred before the property was purchased,
then it is not "restoring value" but actually increasing it.

Thus, if the TO owned the house for some time, I would say
the termite work was a repair.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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bvsea[at]value.net (Barbara) wrote:

- quote -

Seems any repair or maintenance could be capitalized, on
that logic.

IMO, this is a necessary repair and should be expensed. No
improvement -- simply returning the property to the
"pre-damage" condition.

Bill

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Rental house had major termite damage. Porch, support
studs, walls, etc. Spent over $7,200 to repair. Of course
he would like to expense. But these "repairs" do increase
the value and lengthen the life of the house. Without them
it probably would fall down someday and noone would pay
otherwise good value without them being done or getting an
allowance, even in CA. I'm thinking capitalize on these
points but looking for confirmation or else approval to
expense. Opinions?

Thanks.
~ Barbara

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