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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.
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