I’m still trying to figure out what counts as an “improvement” vs just fixing stuff that breaks. Like, if I swap out a busted dishwasher for a new one, but it’s the same size and all, is that just maintenance? Or does it matter if it’s more energy efficient? The IRS rules make my head spin sometimes. I’ve got a shoebox full of receipts and zero organization... maybe I should try your folder idea.
That’s a classic landlord headache—what’s a repair, what’s an improvement? Here’s how I break it down: if you’re just swapping out a broken dishwasher for a similar model, that’s usually considered a repair or maintenance. The IRS is pretty clear that repairs keep the property in working order, while improvements add value or extend the life of the place. Now, if you upgrade to something fancier or more energy efficient, it gets murky. Sometimes, if it’s a significant upgrade (like going from a basic to a high-end model), you might have to capitalize it as an improvement.
I’ve been through audits where they nitpicked stuff like this. My rule of thumb: if it’s just restoring function, call it maintenance. If it’s making the property better than before, lean toward improvement. But yeah, those receipts pile up fast. I started using folders by year and property—nothing fancy, just manila folders in a box. It’s saved me a ton of headaches.
Curious—how do you handle stuff like replacing old windows with new double-pane ones? That always trips me up... is that an improvement or just keeping up with code?
