I know I should probably talk to an accountant, but I've come to learn that there are some smart folks that like to hang out around here.
We have a conforming basement suite that we rent out and we live upstairs in the main house (our house is zoned R1B).
Last year we had a plumber come in and replace a failed expansion tank and do a couple other repairs to our boiler unit that provides hot water and radiant in-floor heat to the rental suite. The cost was around $800, so I'm assuming this would be considered a 'current' repair expense that we can claim against our rental income?
However, this year the main 40 gallon pressurized tank attached to the boiler crapped out at the same time the attached furnance was acting up again (both units are over 20 years old). We bit the bullet and went for a high efficiency on demand 'combi' boiler unit made by IBC. It's been great - I totally recommend it!
My question: is the boiler replacement considered a 'current' or 'captial' expense? My preference is for it to be a 'current' expense so I can use it as a deduction next year, but I don't want to push the envelope either. The cost of the combi unit was about $4000 and another $4500 for parts, labor and glycol (man, when the heck did glycol spike in price?! $300 a pail!
)
The other variable is that there are 4 radiant in-floor lines fed by that boiler (2 in the rental suite and 2 in my garage). I was thinking of claiming 75% of the replacement cost against the rental income (hot water on demand system+half of the radiant lines) given that about 25% of the cost of the unit supports the two lines heating my garage.
Does that make sense or am I out to lunch? A current expense is considered 'any minor repair or maintenance that brings the rental property back to original state.' Although $8500 isn't exactly minor...