omenic__[at]hotmail.com wrote:

- quote -

See my previous replies to the OP. For this amount of
money, I don't think there should be much argument. If you
were my client, I would not recommend capitalization.

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

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Including lodging, food, and hired labor the work done did
not exceed $2000.What depreciation method should I be using?

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"Mark A. Hvasta, CPA" <gcollect1[at]sbcglobal.net> wrote:
- quote -

I don't want to get into an argument over this but I do
disagree with you. While it is true that IRS may try to
claim these things must be capitalized, they do not always
win.

It has been some time since I've dealt with this issue on an
audit but I have convinced IRS of the error of their ways
for clients in the past. Because it has been several years,
I no longer have the citations, etc. but I do know that the
courts have not sided with IRS on this issue.

I still say the rules outlined in my previous response is
applicable.

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

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<domenic__[at]hotmail.com> wrote:

- quote -

Due to the extent of the work done, these expenses must be
capitalized and depreciated.

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omenic__[at]hotmail.com wrote:

- quote -

You don't say how much money is involved. If the amount is
significant, IRS may try to get you to capitalize and
depreciate.

However, if you were my client, I might not agree. A repair
is something which restores value or useful life, whereas an
improvement/betterment is something which adds to value or
useful life. Since you were replacing an existing floor,
unless the new items were of a higher quality than the old,
I would argue that it was a repair.

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

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I recently needed to repair a sagging bathroom floor in a
rental property due to water damage from a leaky old tub and
its shower surround. I replaced and reinforced the subfloor,
patched/replaced wet drywall, paint, new baseboards,
replaced the old tub and surround with a new three piece
surround, and replaced the tub/shower hardware to fit the
new shower/tub surround.

Does this constitute a repair? If not, I'm assuming it's an
improvement expensed using the MM S/L 27.5 depreciation
system?

Kind Regards,
Domenic

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