Property maintenance: deductibility of expenses

Always maintenance costs should be divided into ordinary and extraordinary. The difference is substantial, and the tax consequences are radically different.

There is talk of routine maintenance when the objective is to maintain the functionality of the property or as to restore its efficiency after a fault or damage of any kind; special maintenance, however, is intended to increase the value of the asset. For example referring to real property, paint the walls is routine maintenance, add a room is maintenance.

With regard to professionals, once again record how the laws have changed over the years. But the speech is less complex, since this time no matter when you purchased the property, or has been leased: tax regulations is even today.

The Extraordinary maintenance costs are increasing the value of the property: so that they simply must be added at historical cost. Therefore they will be amortizable and deductible if and to the extent that it is the property which they refer.

For the costs of routine maintenance, however, is still being applied the same rule provided for businesses: are deductible in the year in which they were incurred, up to a limit called the "ceiling".

The credit limit is equal to 5% of the historical cost before depreciation of all depreciable assets at January 1, to which is added the historical costs of new assets purchased during the year and subtract one of the assets sold or disposed of in the meantime.

Acquisitions and disposals during the year should be considered in proportion to the days before the sale or after the purchase.

If the routine maintenance costs exceed the ceiling, the excess will be deductible in the next five years in the units of the same amount.

In the promiscuous property, the deduction is reduced as more than half in each case.

 

19/01/2010

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Translated via software

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Source:

Italian version of ReteIngegneri.it