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    MichelDionne's Avatar
    MichelDionne Posts: 1, Reputation: 1
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    #1

    Dec 8, 2011, 10:20 AM
    Tax info - rental house - capital expenses or current expenses?
    I own an older home that is a rental property.
    The roof was well past end of life and my tenants reported a leak so I had the roof replaced by an equivalent (tar and gravel replaced by torch-on). Is this a current or capital expense?
    Also, new tenants complained about the windows (again at or past end of life) because many of the seals were broken and almost all no longer had proper locks. I had these replaced by an equivalent (double pane by double pane, but the newer low-e rated energy efficient). What about this one, current or capital?
    Thanks for the info
    Michel
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Dec 8, 2011, 11:46 AM
    A new roof is generally considered to be an improvement since it extends the life of the building, and hence is capitalized. The windows are less well defined - in general repairing a window or replacing with like-for-like is a current expense as it doesn't materially increase the market value of the property, even if the new ones are marginally better at energy savings. I suppose if the new windows were significantly better at energy savings the IRS could argue that they are an improvement (like adding insulation in the attic), but in my opinion the new windows would have to have a pretty significant impact on your energy use for this to stick.
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