Last year I purchased a 3 unit apartment building. Among the expenses that I incurred in 2004 were $3000 for painting and approximately $8000 for new windows. I'm assuming that painting would be considered maintenace and could be shown as an expense for 2004. Because of the poor condition of the original windows, I was wondering if the new windows would be be considered a repair? How would you suggest handling the windows on my 2004 tax return? Thanks.
John
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It sounds to me like both projects are capital expenditure. When you bought the building, you knew you would need to paint and replace the windows. Thus, at least in theory, you paid less for the property than you would had it not been necessary to do these projects. The fact is, these expenditures were just part of the cost of acquiring the property and placing it service. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans
It all depends. Really. Depends on when you started renting the place. I would guess from the way you say it above however, that all those expenditures were before renting, and therefore not repairs, but are to be added to the basis (cost) of the property. Right?
ChEAr$, Harlan Lunsford, EA n LA Sun 27 mar 2005
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