Do I have to depreciate the new carpet and vinyl flooring in my rental property?

Question

This was more a repair than an improvement since my condo is built right on the slab and I HAVE to cover the floors with something. The old carpet & vinyl were 20 years old and basically in tatters. I'd like to be able to deduct the entire cost in one year rather than depreciate it, if that's possible?

I used builder's-grade carpeting and vinyl flooring and the total cost for the whole job was less than $5,000.

Answer 1

I'm no tax attorney, but you should be able to. My mother-in-law owns rental property - she just did some work to it and plans on writing it all off this year.

Answer 2

Replacing carpet and vinyl in an classified as an improvement and not as maintenance like painting, cleaning service, repairs, etc.

Go to www.irs.gov and then to publications.
They can be downloaded or read online.
Hope this helps you find your answer.
Publication 527 (2005), Residential Rental Property
(Including Rental of Vacation Homes)


Publication 527 - Introductory Material
Reminder
Introduction
Sale of main home used as rental property.
Tax questions.
Ordering forms and publications.
Useful Items - You may want to see:
Publication 527 - Main Contents
Rental Income
Rental Expenses
Repairs and Improvements
Other Expenses
Condominiums and Cooperatives
Not Rented for Profit
Property Changed to Rental Use
Renting Part of Property
Personal Use of Dwelling Unit (Including Vacation Home)
Dwelling Unit Used as Home
Figuring Days of Personal Use
How To Divide Expenses
How To Figure Rental Income and Deductions
Depreciation
Filing an amended return.

Answer 3

IRS Publication 527 discusses repairs and improvements. It includes "fixing floors" as a repair rather than an improvement, but includes "flooring" and "wall-to-wall carpeting" as improvements! It comes down to the factual question whether the work adds significantly to the value or useful life of the property. If this is something that is done only once every 20 years or so, and the cost is substantial in relation to the value of the property, and IRS agent may dispute the deduction of the entire cost in one year.

Answer 4

Unless you bought some very extravagant carpet & vinyl flooring, I don't think you would have a problem deducting the whole expense this year.
If it was particularly extravagant and very costly and it added value to the property as opposed to being something that wears out and needs replacing an argument could be made towards depreciating it instead of expensing.

Answer 5

I love carpet and so far every place that I have rented in the past I always got new carpet layed for me before I moved into it. I also always put throw rugs on the floors where ever the high traffic was at. I hated walking on a bare floor in the winter time.

Answer 6

Wayne - Section 179 doesn't apply to real property, but it does apply to personal property. Whether or not the activity is a rental actvity has no bearing on it at all.

Answer 7

Unless you plan on replacing the carpet and floor coverings every year, it is an improvement and not a repair and should be depreciated.

You said yourself, the previous carpet lasted 20 years. Depreciate it!

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See below....
Section 179 does not apply to rental property fixtures, appliances or improvements.

Answer 8

You can claim the expense as depreciation -and take a Section 179 deduction. That means that you can take it all at one time. As long as it does not exceed a preset limit (about $110,000 for 2006)

Answer 9

I believe you can call it a maintenance expenditure. If you had to paint the walls, it would be maintenance. I think if you asked 3 different tax people that question, you would get 3 different answers. Make a decision and stick to it.