Sam owns a small apartment building (this is the only rental building Sam owns). During the year Sam incurs the following expenditures:
Item Amount
Replace roof and roof underlying structure because of
building code requirements ……………………………………………….. $30,000
Repaint the interior ……………………………………………………….. 3,000
Repair door handles and door locks ……………………………………… 1,000
Replace broken windows …………………………………………………. 1,500
Replace crumbling sidewalks and stairs because of
building code requirements ………………………………………………. 25,000
Discuss the proper tax treatment for these expenditures.