AC is broken in my rental home, and it needs to be replaced… so my question, can I receive tax deduction for the AC replacement? I know repair is tax deductable, but not sure about replacement, because I wonder if this would count as home improvement, as opposed to repair…
Asked by:younglee76
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Replacement of a central AC unit is not one of those expenses which you can deduct fully in a given tax year. The cost of such must be ‘amortized’ over a number of years. You must consult the IRS to determine the ‘depreciation life’ of this cost. It may be about ten years, and that will allow you to claim a deduction of 10% of the total cost each year.
Is this a little window air conditioner, or a big central air? If it’s expensive, that will be treated as capital. In that case, you still get to deduct it, but by depreciating it over time. Here is IRS pub 946, which may help