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We have a question regarding rental properties. We had to replace a furnace this year in a rental property. The furnace went out and the repair cost was about 65% of the replacement cost (circuit board, blower, etc). We opted to replace the furnace.

Our accountant thinks this should be written off as capital and we feel that it could be considered an expense because it was necessary and wasn't done to resell the home or anything like that.

Thanks for your input.
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