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- Hi, everybody, Thomas Castelli here from the Real Estate CPA. And today, were gonna discuss repairs verse capital improvements. Some of your rehab expenses whenever youre repairing a property will be considered a normal repair, which is simply replacing a tile in the bathroom, or maybe, replacing one window in the property. Whereas other rehab expenses are considered capital improvements because you are substantially improving the property, or replacing something in total, for instance, all the windows, or all the flooring in your house. This is an important distinction because repairs can be deducted in the year that theyre paid for, while capital improvements have to be capitalized and depreciated over their useful lives. The good news is, if your capital improvements are under $2,500 per line item on an invoice, you can use it as the minimum safe harbor to expense them just like a repair. If youre interested in learning more about repairs verse capital improvements, and the di