Rental Improvement

[Donanita]

Client had stabalization done on rental duplex. I know this is a improvement but was wondering about the time period. In our area this my last for a year and then it may last for 5-10. Can 7 yr be used vs 15

[Burke]

Why did he have it stabilized? Was it falling down? Or did he just think it was a good idea? If done as an improvement, depreciate over life of bldg - 27.5 yrs.

[ChEAr$]

Why did he have it stabilized? Was it falling down? Or did he just think it was a good idea? If done as an improvement, depreciate over life of bldg - 27.5 yrs.

Concur. And this is based on my pool situation in another thread. Without stabilization, the building would eventually be uninhabitable, rather unrentable.

[Donanita]

Stablized

In Louisiana the homes shift and the foundation cracks so the homes have to be stablized

[Donanita]

This is not really a improvement nor addtiton as no value is added to the property but a repair as the foundation has cracked and the bldg is/will shift. Client paid $5000 and was hoping at least a 15 yr life could be used as this will have to be done again before 27.5 yr or even 15 yrs. Oh well 27.5 it is

[taxea]

This is not an improvement because it is necessary maintenance to keep the property in good condition rather than raise the value of the property. I would expense in the year paid.
This is like termite tenting which we have to do in Hawaii every 5-7 years to maintain the structure from crumbling around us.
An improvement would be more in the lines of major structural upgrading due to age of home. That would be expected to have a full life of 27.5 years or more.

[Donanita]

]This is not an improvement because it is necessary maintenance to keep the property in good condition rather than raise the value of the property. I would expense in the year paid.

You are probably right as this adds no value to the property but levels the bldg when doors,cabinets,etc began to come loose from the walls. Not including other problems you have. It is a maintance to keep the bldg rentable vs improving the property,but then the bldg has been improved as it's in better condition.Just depends on how the IRS see it.

[taxea]

]This is not an improvement because it is necessary maintenance to keep the property in good condition rather than raise the value of the property. I would expense in the year paid.

You are probably right as this adds no value to the property but levels the bldg when doors,cabinets,etc began to come loose from the walls. Not including other problems you have. It is a maintance to keep the bldg rentable vs improving the property,but then the bldg has been improved as it's in better condition.Just depends on how the IRS see it.

I would say there is an argument to be made that this keeps the property in the condition it was in when first rented therefore is not an improvement but maintenance.