The question is painting considered maintenance or a capital expense?  People are searching for ways to save money in light of the economy’s current status.  Painting houses do not count as capital improvements.  Therefore, property owners cannot deduct the expense of painting from their taxes.  However, in the business world, you can capitalize painting costs, which has many advantages for a company.  A business can save money on taxes by capitalizing these costs so that they can be written off over time.  The expense of the painting project may also be stretched over time, making it more affordable.


Exterior Paint a capital expense?

Residential Properties

As spring approaches, you may be wondering if repainting the exterior of your residential rental property is deductible.  By itself, the cost of painting the exterior of a building is generally a currently deductible repair expense because merely painting isn’t an improvement under the capitalization rules.  However, if the painting directly benefits or is incurred as part of a larger project that’s a capital improvement to the building structure, then the cost of the painting is considered part of the capital improvement and is subject to capitalization.

Painting a rental property is not usually a depreciable expense.  In most cases, however, you can write it off as a deductible business expense instead.  The IRS divides any work you put in on your rental into improvements and repairs.  You claim the total cost of repairs on your taxes but depreciate improvements.


Improvements Vs. Repairs

The IRS defines improvements as projects that increase the value of the property or lengthen its life, such as a new kitchen or a new roof.  You write off the cost of improvements on your taxes by depreciating them over 27.5 years.  Repairs are projects that bring the rental back up to a usable level: Plumbing jobs, painting, fixing broken windows and fixing broken stairs.  The only time you get to depreciate repairs is if they’re part of an improvement: Painting a new wing of the house or replacing the paint when you remodel the kitchen would qualify.


Deducting Repairs

If you hire someone to paint the house, his fee is your deductible expense.  If you do the job yourself, you deduct the cost of your paint and other supplies, and the cost of transportation.  Trips from your home to the paint store and the house are deductible, either by claiming the actual cost or deducting a standard per-mile rate.  If you are reporting rental income on a cash basis, as most owners do, you claim the deduction in the same tax year you pay the bill for repairs.


Contact us

Productive painting offers professional power washing and residential, commercial, and industrial interior and exterior painting services to the communities of Wall, NJ and throughout Monmouth County, NJ. Fully licensed and insured, Productive Painting Company is owner operated NJ LICENSE #13VH04439800.  Hours of operation Mon to Fri 8 AM to 5 PM and Saturday 8 AM to 1 PM.  Closed Sundays.

Productive Painting Call Now: (877) 298-9688

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