Tax time question

[Aaron]

Which way would you depreciate a water well repair (fracking)? As a capital expense or a general current year expense? Cost was just over 4k.

 

[Jogeephus]

All my repairs are deductions - I think.

 

[1982vett]

All my repairs are deductions - I think.

Pretty much the same here. Few years back we did depreciate a major overhaul on a tractor. I'd be comfortable expensing work done on an existing well. Work on A new one might be a different story.

 

[Jogeephus]

Work on A new one might be a different story.

The "newness" is the key in my mind. Something expensive and new that has a life is what I go on. Something that can improve value but depreciate with time. Fixing something is just that. However if the cost of the repair is going to cause a deduction greater than taxable net income I might try and capitalize the cost over time to get the full tax benefit but whenever possible I'll go the deduction route. Just my opinion and my accountant might say different.