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Tax Planning/Rental House Deductions


Hi Owen,

We have a house we rent out in tornado alley and are arranging to have a storm shelter installed.  Later we plan to upgrade the counter tops from Formica to modern, and have a sprinkler system installed in the lawns.  Are these tax deductions or depreciations?

Thank you for your time,

David - Generally speaking anything spent and placed in service with a value over $100 that has a useful life over one year needs to be capitalized and depreciated according to IRS depreciation rules.  A storm shelter, installation of countertops and a sprinkler system all sound like they meet that criteria and therefore should likely be depreciated.

I hope this helps.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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