Sam owns a small apartment building. This is the only rental building that Sam owns. During the year, Sam incurs the following e
xpenditures. Discuss the proper tax treatment of each expenditure
Item Amount Expense or Capitalize Basis for your decision
Replace roof and roof underlying structure because of building code requirements $80,000
Repaint the exterior $9,000
Repair door handles and door locks $1,000
Replace broken windows $1,500
Replace crumbling sidewalks and stairs because of building code requirements $47,000
Item Amount Expense or Capitalize Basis for your decision
Replace roof and roof underlying structure because of building code requirements $80,000
Repaint the exterior $9,000
Repair door handles and door locks $1,000
Replace broken windows $1,500
Replace crumbling sidewalks and stairs because of building code requirements $47,000
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