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I wish to lay new flooring in my property that I am listing…

I wish to lay new...
I wish to lay new flooring in my property that I am listing on airbnb,
would that be considered a reasonable expense for tax purposes ?
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Answered in 27 minutes by:
6/25/2018
James Daloisio
James Daloisio, Tax Attorney
Category: Tax
Satisfied Customers: 850
Experience: 24 years of continuing education and experience.
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Hi, my name is ***** ***** welcome to Just Answer.

Flooring that is permanently affixed to the property, i.e., nailed, glued, stapled, etc., is a capital improvement. it becomes part of the property and must be depreciated over the same period as the property itself, 27.5 years.

If the flooring is not permanently affixed such as with tacked down carpeting or "floating" laminate flooring, it remains personal property and is depreciated over five years.

Under the new Tax Cuts and Jobs Act, you can deduct the entire cost of the project in the first year under Section 179. Ordinarily, "expensing" is not allowed for property that is used to furnish lodging, but IRS Publication 946 gives this as an exception:

Property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients.

Note the language "predominant portion." If you are living in the unit yourself and just rent out a room, you won't qualify for this exception. If you rent out the entire unit more than half the year, you'd probably qualify.

The limit for 2018 is $1,000,000, subject to a business income limit (you can't expense more than your business earned). Any portion that is not expensed is depreciated.

Hope that helped. Please don't forget to rate this answer. You may always return here with follow up questions on this topic at no additional charge. Thank you for using Just Answer!

James Daloisio
James Daloisio, Tax Attorney
Category: Tax
Satisfied Customers: 850
Experience: 24 years of continuing education and experience.
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Customer reply replied 1 month ago
thanks for your comprehensive reply, unfortunately the question was referring to the UK tax system

Well that makes a difference. Please note that the country shown in the header of your question is "United States." I do not see any indication of the property being in the UK. But....

If this air b n b is located in your home and you're just renting out a room, there is something called the "Rent a Room Scheme" where the first 7,500 pounds of income are tax free; under the wear and tear rules, since 2016 landlords have been entitled to "Replacement Relief" where you can deduct the replacement cost of items, including worn flooring. This relief applies to all rented properties, whether furnished or unfurnished.

You can claim the cost of a replacement item, with a maximum value of a modern equivalent in the event that the new item is an improvement on the old one. You may also claim the cost of disposal of the old item and installation of the new one, but you have to deduct any cash or payment in kind received for the old item.

To claim the wear and tear allowance you must have your itemized receipts.

This relief is only available on items that are provided for the sole use of the tenant. Replacement Relief is not available to properties that you’re claiming under the Rent a Room scheme.

Hope that hit a little closer to home! Thanks again for using Just Answer!

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