Question
Assume all residential real estate improvements are capitalized over 30 years. Five years ago, Kelly purchased a home in Queens, New York to rent to
Assume all residential real estate improvements are capitalized over 30 years. Five years ago, Kelly purchased a home in Queens, New York to rent to her college roommate, Linda. Things had gone well with this investment until this year when Linda insisted several "small problems" be addressed. Because Kelly wanted to keep Linda as a tenant, she told Linda to make arrangements to have the problems corrected and to send her the bill. Kelly was surprised when the bill which included: $385 to repair outside lighting, $1,228 to repair the bathroom floor tiles, $16,363 to replace the sewer line, $3,754 to paint the house, and $1,241 to repair leaking faucets. When Kelly confronted Linda about these costs, Linda pointed out that all these costs would reduce Kelly's tax bill.
Based on the above information, how much will Kelly be able to deduct as a result of these costs?
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