Question

Lacy owns a condominium that she rented all year. She paid $250 to plaster a hole in the living room drywall, purchased paint for $175 to repaint the kitchen, replaced a broken window for $300, replaced the water heater for $1,700, and paid $4,930 to replace the heating system. How much did she spend on repairs?

Answer 1

To determine how much Lacy spent on repairs, we need to classify each expense as either a repair or a capital improvement. Repairs typically maintain the property’s condition without significantly enhancing its value, while capital improvements increase the property’s value or extend its useful life.

Here are the expenses Lacy incurred:

1. Plastering a hole in the living room drywall: **$250** (Repair)
2. Paint for repainting the kitchen: **$175** (Repair)
3. Replacing a broken window: **$300** (Repair)
4. Replacing the water heater: **$1,700** (Generally considered a capital improvement)
5. Replacing the heating system: **$4,930** (Generally considered a capital improvement)

Now, we add up the amounts that are classified as repairs:

- Plastering a hole: $250
- Repainting the kitchen: $175
- Replacing the broken window: $300

Total repairs = $250 + $175 + $300 = **$725**

Thus, Lacy spent **$725 on repairs**.