Residential rental property: how to capitalize improvements

[HN]

Hello, I have a client who made improvements to his residential rental property.  What asset class should I select for these improvements? 

1) kitchen/bathroom remodeling: J5 - qualified improvement property?

2) New appliances: F - Rental furnishings?

3) New windows: J5 - qualified improvement property?

4) New roof/HVAC: J6 - Roofs/HVAC/Fire/Alarm/Security?

I'm confused because under the definition of Qualified Improvements or Qualified Leasehold Improvements, it refers to "commercial" buildings.  The property is residential..

[TaxGuyBill · Accepted solution]

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@HN wrote:

Hello, I have a client who made improvements to his residential rental property.  What asset class should I select for these improvements? 

1) kitchen/bathroom remodeling: J5 - qualified improvement property?

2) New appliances: F - Rental furnishings?

3) New windows: J5 - qualified improvement property?

4) New roof/HVAC: J6 - Roofs/HVAC/Fire/Alarm/Security?

I'm confused because under the definition of Qualified Improvements or Qualified Leasehold Improvements, it refers to "commercial" buildings.  The property is residential..

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Exactly.  So #1, #3 and #4 would be depreciated a Residential Rental Property, usually over 27.5 years.

Although there is a good argument that merely reshingling is not a new "roof" (at least in some cases) and could potentially be deducted as a repair.

[MICHAELMARS]

You might be able to write off remaining basis of replaced assets under the Partial Asset Disposition regulations.