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Tax Law (Questions About Taxes)/Depreciation of Rental Property

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Question
Dear Bruce,

I have a rental that had been broken into a few months ago.  I spent $600 to replace an iron door.  My question is, can I list the door as an asset that can be depreciated?

If yes, do I have a choice to select 27.5 years or 25 years?  When I select 25 years, I can get a 50% bonus depreciation, giving me more on my refund.

Finally, what asset type is the door considered?  Here are the choices I have: residential rental property, non-listed property, or listed property.  

Thank you so much for your help!

Michael

Answer
Hi Michael,

You can list the door as an asset with depreciation over 25 years and take bonus depreciation on it if you wish. However, the replacement cost is relatively low and I do not see a big issue with simply calling this a simple repairs expense.

The door is not an improvement, so I would not take 27.5 years on it. Take it as a repair in full. If audited, show the auditor the report of the break in. $600 is nothing to fret about.

Take care,  

Tax Law (Questions About Taxes)

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Bruce W. Tyler, EA

Expertise

I can answer questions with regard to the following: Preparation/Tax Law regarding Individual Income Tax (IRS and California), Audit Representation/IRS Procedures of personal and corporate income tax including appeals, IRS Collection procedures for individuals, partnerships and corporations, Offers-in-Compromise, Installment Payment Plans, Penalty Abatement,Income from Cancellation of Debt. Heavy experience with Public Safety (i.e. Firefighters, Police Officers, Correctional Officers, etc) as well as medical industry.

Experience

21 years in tax preparation and representation

Organizations
National Association of Enrolled Agents

Education/Credentials
4 years of accounting at Woodbury University/UCLA Extension

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