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My question assumes MACRS GDS depreciation, in the United States.

I converted my primary residence to a rental property last year. While I still lived there, I installed laminate flooring in some of the rooms. This type of flooring snaps together without glue, sits on a layer of foam, and is not fastened to the home in any way. The edges (up against the walls) are covered with trim (moulding) that is nailed to the walls.

If this had been new carpet, it would be considered as a separate asset with a 5-year recovery period.

If it had been a new roof, it would have been considered an "improvement" and added to the cost basis of the rental property, being depreciated over the property's 27.5-year recovery period.

How should I treat the laminate flooring?

For clarity, this is the type of flooring that I'm referring to:

instructions

finished

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  • Well, for casino construction they get to use a 5 or 7 year life, according to a 2006 IRS Field Directive I saw on the net. Hmmm... irs.gov/Businesses/…
    – user33595
    Commented Sep 28, 2015 at 22:03

2 Answers 2

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Aesthetics aside, laminate floor is attached to the floor and as such is a part of the building. So you depreciate it with the building itself, similarly to the roof.

I believe the IRS considers these permanently attached because the foam itself is permanently attached, and is a part of the installation. To the best of my knowledge, the only flooring that is considered as a separate unit of property is tucked-in carpet or carpet pads (typically installed in commercial buildings, not homes). Everything else you'll have to prove to be an independent separate unit of property.

Technically, you can take the tucked in carpet, and move it elsewhere as-is and be able to install it there assuming the size fits. You cannot do it with the foam (at the very least you'll need a new foam cover in the new location since you cannot take the foam with you from the old one). That's the difference between a "separate unit of property" and "part of the building".

Note that the regulations in this area have changed significantly starting of 2014, so you may want to talk to a professional.

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  • Laminate flooring is usually installed floating (not actually attached to anything) and wall-to-wall carpet is usually tacked down to the floor (attached).
    – Ben Miller
    Commented Mar 6, 2015 at 12:28
  • @BenMiller "tacked down" is not considered attached. Laminated flooring is usually glued to the floor, at least from my experience.
    – littleadv
    Commented Mar 6, 2015 at 12:38
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    @littleadv - the product Ben (and I) are thinking of, Pergo being one brand, sits on top of a thin layer of foam. That said, I agree, it's considered permanent, claims a long life, and should be capitalized.
    – JTP - Apologise to Monica ♦
    Commented Mar 6, 2015 at 13:42
  • littleadv, @JoeTaxpayer: I'm sorry for the ambiguity. Yes, the flooring is an engineered product that sits on foam, and is not fastened to the house. I've added examples to the question. Does this change your answer? Thanks!
    – bitsmack
    Commented Mar 6, 2015 at 15:17
  • @bitsmack I believe the IRS considers these permanently attached because the foam itself is permanently attached, and is a part of the installation. To the best of my knowledge, the only flooring that is considered as a separate unit of property is tucked-in carpet or carpet pads (typically installed in commercial buildings, not homes). Everything else you'll have to prove to be an independent separate unit of property. Technically, you can take the tucked in carpet, and move it elsewhere as-is and be able to install it there assuming the size fits. You cannot do it with the foam.
    – littleadv
    Commented Mar 6, 2015 at 15:19
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Floating laminate flooring is not attached to the floor. That is what floating portends. The laminate is laid either directly on concrete or on top of a noise/moisture barrier, and is only held in place by the trim attached to the baseboard. The laminate can, therefore, just like carpeting, be removed without damaging it, and most of it would be still re-usable.

Thus, floating laminate should be eligible for 5 Year MACRS depreciation and not the 27.5 or 39 years straight Line mandatory in the case of residential / commercial real estate properties respectively.

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