My wife has a small business renting a cottage on a lake. She decided to have the spare bedroom renovated. In doing so they found that squirrels had damaged some of the wiring in the ceiling and that the cottage wiring would have to be brought up to code.

My question is that rewiring is almost all labor plus a relatively tiny amount going to the new wires, perhaps a new circuit breaker box, etc. Can we depreciate the whole bill?

I can't answer what I think your question ought to be, so for the benefit of the pros, let me re-work things a bit.

You seem to be asking whether labor is a valid expense. Of course it is if you're paying someone. You cannot charge your own time as an expense.

I'm not sure we're both looking at the word "depreciation" the same way. Capital improvements are depreciated over the prescribed life of the property. Repairs are expensed entirely in the year paid.

To me the question is whether the electrical part of this project could be expensed or must be depreciated and, if the latter, over how many years.

Phil
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