Depreciation or expense ?


M

Mauibob

This question is on depreciation vs. expense.

If a commercial rental had an air conditioning unit go bad.
It broke down due to old age & use. It needed replaced.

Is this $2,000 depreciated as an improvement or expensed as
a repair?

I know about it needing to add value to the property to be
an improvement and yes it does, but it was 100% broke and
needed repaired / replaced.

Thanks in advance.
 
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N

Nan Eklund

I've heard lecturers on the subject say that if the item was
there before, and is simply being replaced, expense it.

Nan, EA in LA
 

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