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Subject:  Depreciation Date:  4/19/2011  3:33 PM
Author:  brucedoe Number:  113215 of 128041

This item does not apply to 2010 (which is thankfully over for us) but to 2011.

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?

When a house is built, you do not separate the cost of the materials (maybe 10% of the total bill) from the labor (around 90%) but depreciate the total bill so my guess is that we can depreciate the whole bill because, with the rewiring, the whole thing will have to be done again in say 15 or 20 years or so.

A part of the cottage harks back to around 1890 and the electrician said he would guess the wiring was done in the 1920s.

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