Last Minute Tax Tip - Repairs due to Vandalism can be Expensed Immediately
If rental property is damaged by vandalism, the cost of repairing the property to its previous condition is immediately deductible instead of being capitalized and depreciated.
For example, say you replaced an entire window frame on your property. Normally the cost would get added back to the basis and depreciated because windows are a component of the building structure (depreciated over 27.5 years).
However, since the improvement is the result of vandalism, it is treated like a repair, and the costs are deducted in the year the expenses are incurred.
Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.