removeps-groups[at]yahoo.com wrote:

- quote -

That could reasonably be accomplished by having the vendor supply the
figure for an alternative simple replacement with the same (old) model
-- presuming availability -- and either invoice as "repairs" +
"upgrades" with two separate charges for accounting convenience ... or
simply provide one bill for "repair with improvements" and separately
submit a letter notice of what cost would have been to simply repair by
replacing with the same model.

It is not unknown for a vendor to advise that they can repair item (X)
with replacement parts at a cost of ($Y) -- but for ($Z), they could
supply a new and upgraded unit (X+) ... and that information could be
the basis for allocation -- either by the raw numbers or a percentage.

Bill

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On Dec 25, 7:30 am, an_ordinary_guy_...[at]hotmail.com (Bill) wrote:

- quote -

Generally, any significant replacement will be an improvement because
technology is getting better all the time. So in this case, I'd like
allocate a portion of the replacement that is true replacement, and
the balance would be an improvement. Not sure if you can do this, or
how you would allocate.

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"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9B808CE3D7E15avocatstuyahoofr[at]130.133.1.4...
- quote -

That, in itself, gives landlords and tenants reason to argue. And, I agree
with you, I don't know if that test with respect to Real Property Law has
much bearing on income tax issues.

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"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

The normal rule is that it is a "fixture" if it can't be removed
without doing some damage to the building. But I don't know that is a
helpful distinction to make when determining whether to expense or
depreciate something.

Stu

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"Arthur Kamlet" <kamlet[at]panix.com> wrote in message
news:gj35bm$mt0$1[at]reader1.panix.com...
- quote -


Is there a general rule of thumb to determine what is and what is not part
of the building for such purposes? I think this seems to be more confusing
than what is a repair vs. replacement, once one knows if the item is a
"stand alone" item or part of a larger item.

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In article <Jj75l.234573$Mh5.32975[at]bgtnsc04-news.ops.worldnet.att.net> ,
Gil Faver <rowdy'sboss[at]xxyz.com> wrote:
- quote -


I agree with the moderator. If the carpeting is being replaced
it would be a depreciable five-year Sec 1245 asset.


However if someone burned a few cigarette holes in the carpeting,
and a few small sections of carpeting replaced the burned ones,
that would be expensed.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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"Lanny Williams" <lanny[at]loxinfo.co.th> wrote in message
news:4953d50a$0$31157$882e0bbb[at]news.ThunderNews.com...
- quote -

a good rule of thumb, but don't you also need to consider what it is that
you need to apply this rule to? In other words, is it the building or the
item in the building? A new carpet would never extend the life of the
building, so it should always be expensed? Likewise with an appliance?
This is another area of confusion.

========================================= MODERATOR'S COMMENT:
Nope - This is an incorrect rule of thumb and can easily cause
confusion. Carpet, appliances, etc, are not part of building, but are
items that must be depreciated.

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Dick Adams wrote:
- quote -

Repairs - RESTORE value or life
Improvements - EXTEND life or ADD value
I'll admit it is not always easy to make this distinction and you can
make arguments either way for many expenditures. But, if you keep this
rule in mind, you should be able to decide.

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

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rdadams[at]panix.com (Dick*Adams) posted:

- quote -

The key word is "repair," Dick. If an existing item is being fixed,
it's expense. If a new item is being added, it's capitalized.

Grey area involves upgrades. You can replace an AC/Heat Pump that's
failed, but what if the replacement includes a programmable thermostat,
and 2-speed motor (more efficient)? That may depend on supplier invoice
-- e.g., "Repair AC" -- $000, as opposed to "Install new AC" -- $000.
Obviously, the owner may influence this per agreement with vendor -- and
likely that is common.

The second issue is total cost, as you suggest in your question: "how
significant can these expenses be?" One example: A rental unit, which
"repairs" carpeting at a cost of $6,000 appears suspiciously like an
_improvement_, and probably should be capitalized. (On the other hand,
a $600 "repair" would likely slide with no questions raised.)

This is an endless question. Perhaps you meant this as a Christmas
present?

Bill

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If I read this correctly, a landlord can take repair
expenses on a rental unit in the year paid. But how
significant can these expenses be?

Cleaning and painting expenses are obviously deductible.
What about
- replacing carpeting and limoleum?
- replacing light fixtures?
- refinishing cabinets?
- replacing panel boards?
- installing outside railing on stairway?

The list gets longer.

But the issue is what can be expensed and what must be
capitalized?

Dick

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