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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I own an eight unit mobile home park. All units are rental

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I own an eight unit mobile home park. All units are rental properties. One unit was destroyed in a propane explosion. All units are fully depreciated and unisured.

I replaced the destroyed unit with a unit built in 1974. My accounting method is cash. Should I expense the replacement (cost approx 6K), section 179 it, or depreciate it?

Since the unit which was destroyed had been completely depreciated, you would have no deduction to claim as a result of the loss.

However, the replacement unit which you purchased may now be depreciated. You cannot simply expense the replacement unit, but you may depreciate the unit over a period of 27.5 years, and you may also claim the Section 179 deduction.

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