Title: Capital Improvements vs repairs. What's the difference?
Headings: Capital Improvements vs repairs. What’s the difference?
Capital Improvements vs repairs. What’s the difference?
Construction’s impact on your property’s functionality is the key
What are the definitions?
What’s the difference in the IRS’s eyes?
What goes into a Capital Improvement Plan?
Benefits of a CIP
Features of a CIP
Capital improvement examples
A capital improvement plans example
How can we help?

Content: What’s the difference in the IRS’s eyes? There is a difference between repairs and capital improvements as regards your tax filing. Consult your tax accountant for how this impacts you. This post is not advice, just a synopsis. According to Dermody, Burke & Brown, CPAs: “There has been much debate and controversy not to mention a number of court cases regarding whether, or to what extent, the amounts paid to restore or improve property are capital expenditures or deductible ordinary and necessary repair and maintenance expenses.” The IRS has now defined what is capital as opposed to what would be considered a repair and routine maintenance. Property capital improvements include: Fixing a defect or design flaw
Creating an addition, physical enlargement or expansion
Creating an increase in capacity, productivity or efficiency
Rebuilding property after the end of its useful economic life
Replacing a major component or structural part of the property
Adapting property to a new or different use
Under the IRS regulations, capital improvements can be applied to buildings themselves and individually to structural components. These include “heating and ventilation, plumbing, electrical, fire protection and security systems and escalators and elevators.”