Repairs and Improvements

Deducting repairs and improvement expenses

The cost of repairs to your property is deductible as rental expense. The cost of improvements is not deductible as an expenses.

How to deduct improvement costs?

You recover the cost of improvements by taking a depreciation deduction, not expense. Keep accurate records separating the costs of repairs and improvements.

Definition of a repair

A repair keeps your property in good operating condition. It does not materially add to the value of your property or substantially prolong its life. Repainting your property inside and out, fixing gutters, plastering and replacing broken windows are all examples of repairs.

Definition of an improvement

An improvement adds to the value of your property, prolongs its useful life or adapts it to new uses.