Re: Carpet and paint - Landlord Forum thread 150988

Re: Carpet and paint by Anonymous on February 7, 2008 @15:05

The lifespan of a product is determined by the total cost divided by the number of depreciation years, for tax purposes only. This does not mean that carpet cannot last longer than the IRS depreciation scales. The brand of carpet would need to be determined in order to address the carpet’s lifespan. Certain carpets have longer lifespan than others. Wool carpet is expected to last ten years in a restaurant or theater but may last thirty years for household use. Many higher grade carpets have a 15-20 year life expectancy. Lower grade carpets may only have a 4-7 year life expectancy.
Painting between tenants is expected every two to three years. Painting within the same tenancy is expected every three to five years. Every state has different guidelines issued by the housing department. A good source for information may be the HUD website.

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Re: Carpet and paint by Anonymous on February 7, 2008 @18:35

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If you depreciate carpet for 5 years for the IRS, you had better use the same schedule for a tenant. If you try to use a different schedule, it is fraud. If you believe the carpet is of better quality or will last longer, then you need to take a longer depreciation schedule for the IRS. The IRS does not require you to use a 5 years schedule. You can choose to use a longer one than the 5 years if you wish.

The IRS allows you to deduct the cost of that carpet that you place in your rental as an improvement. This set a value of the carpet, just as a blue book sets a value for a car. You cannot claim one value for the IRS (government) and another for the tenant unless you want to find yourself accused of fraud or in trouble with the IRS.

If a tenant decides to sue you in civil court over this, he can ask that your tax records be subpoenaed for the hearing. You will have a hard time explaining to the judge why you believe the value of the carpet is different than what you are claiming for your taxes. If the tenant calls the IRS, you will be audited and have to explain this to a tax auditor also! You must claim the same value for the carpet as you use on your tax schedule. The carpet may last longer than what you depreciate it for, but once it is fully depreciated for tax purposes, the carpet no longer has value and you cannot charge your tenants for it.

Re: Carpet and paint by Anonymous on February 7, 2008 @20:39	[ Reply ]

I agree, if you are saying one thing to the IRS, you'd better be saying the same when you are charging your tenants!

Re: Carpet and paint by Joseph (Florida) on February 8, 2008 @13:57	[ Reply ]

Ok - it seems all agree that after a 5 year lease occupancy (of nonsmokers) painting would be an expected expense and as long as there's no holes in the walls this would not be expected to be charged to the ex-lessee and taken from the security deposit. Is this a reasonable statement?

Re: Carpet and paint by Joseph (Florida) on February 8, 2008 @14:05

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Regarding carpet quality - this is a large rental property with several hundred units - carpet quality was decidedly very low - after we moved in for the first several months I'd have to unclog the hose of the vaccume clearing the carpet fibers out whenever my wife vaccumed the carpet.

In 5 years we noted that even after just a couple years when a tennat moved out they replaced the carpet.

Since the carpet was not expect to last long term how can it be reasonable to charge the ex-lessee for replacement.