Title: Repairs vs. Improvements: Complicated IRS Rules | Nolo
Headings: Repairs vs. Improvements: Complicated IRS Rules
Repairs vs. Improvements: Complicated IRS Rules
Understand the IRS rules on improvements including unit of property, betterments versus adaptions, and building systems.
What Is an Improvement Under IRS Rules?
Betterments
Restorations
Adaptations
What Does the IRS Consider a Unit of Property (UOP)?
UOP #1: The Entire Building
UOP #2-9: Building Systems
Using Safe Harbors to Deduct Repairs and Improvements
Safe Harbor for Small Taxpayers
Routine Maintenance Safe Harbor
De Minimis Safe Harbor

Content: UOP #1: The Entire Building
The entire building and its structural components as a whole are a single UOP. A building’s structural components include: walls, partitions, floors, and ceilings, and any permanent coverings on them such as paneling or tiling
windows and doors
all central air conditioning or heating system components
plumbing and plumbing fixtures, such as sinks and bathtubs
electric wiring and lighting fixtures
chimneys
stairs, escalators, and elevators
sprinkler systems
fire escapes
other components relating to the operation or maintenance of the building, and
roofs. For example, replacement of a building’s roof is an improvement to the building UOP. UOP #2-9: Building Systems
In addition, the following eight building systems are separate UOPs. An improvement to any one of these systems must be depreciated: Heating, ventilation, and air conditioning (“HVAC”) systems: This includes motors, compressors, boilers, furnace, chillers, pipes, ducts, and radiators.