Deduct or Capitalize my Repair Costs?

Whether an expenditure qualifies as a currently deductible repair or is required to be capitalized is a factual determination. The burden of proof rests with the taxpayer, and sufficient contemporaneous records must be maintained. It is important to correctly characterize such expenses from the beginning. Otherwise, amended returns may have to be filed and that may require a change in accounting method request which could result in an IRS audit.

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