> Either your CPA friend is ignorant (since after all not all CPAs specialize in income tax) or you misunderstood.

I might have misunderstood, but he was keeping it simple for me. I'm 100% positive that he was correct though, to what angle - I'm not exactly sure.

After doing some more research on my own, I think the double-dipping stands. In essence it comes down to a statement like this: "my property is worth less year over year - look, the shingles are starting to come off! Oh, by the way, I spent $2000 fixing the shingles."

So, first, let's tackle depreciation. For rental, the entire property value depreciates and this is tax deductible. It's about 3% of the property value every year [2], regardless of any repairs. If there is an improvement made, that changes the cost basis [2, 4] which then changes the size of the pie where 3% is then taken out of that [2]. In essence, the IRS, per the tax code, essentially thinks that a rental property after 25 years will be worth nothing. To some extent, this makes some sense, appliances wear out, buildings do need maintenance and eventually they are re-modeled and re-done.

But, repairs & depreciation are mutually exclusive for the tax code, so long as that repair does not enter the 'improvement' territory. So, if you fix all of things that are depreciating, you still get to claim the depreciation overall, and you get to claim the repair costs of those depreciating items.

These are the resources I used:

[1] https://www.irs.gov/businesses/small-businesses-self-employe...

[2] https://www.investopedia.com/articles/investing/060815/how-r...

[3] https://www.nolo.com/legal-encyclopedia/tips-maximizing-repa...

[4] https://www.nolo.com/legal-encyclopedia/top-ten-tax-deductio...

[1] is interesting and has this key quote:

> You can deduct the costs of certain materials, supplies, repairs, and maintenance that you make to your rental property to keep your property in good operating condition

Note, it does not say "or" repairs, and that list does not include improvements. Basically this is to say, a $100,000 property after one year of renting, to the IRS is worth $97,000 - whether or not there was actually $3000 worth of wear and tear is immaterial, and if you spent $3000 to fix that wear and tear is also immaterial, you get to claim the depreciation and repairs both.

The [4] reference really emphasizes why land lords do not want to replace things, and instead will focus on repairs:

> Landlord Tax Deduction #3: Repairs
A significant tax break for landlords can arise when they make repairs to their properties: The cost of repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

For some completeness, resource #4 addresses depreciation as the 2nd bullet point right before repairs:

> Landlord Tax Deduction #2: Depreciation for Rental Real Property
The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the property over several years (27.5 years for residential real property). Landlords can reap the benefits of depreciation even if the property increases in value.

Thus, my conclusion - if a person is fixing everything that is breaking and wearing out in a rental property - I don't see how exactly that property is depreciating by 3% every year. The depreciating things are getting fixed! I would call that double dipping. Reasonable people might still disagree.

Though, to the larger point, resource [4] has a section "Other Important Tax Tips for Landlords", reading through that list is a whole slew of things not available to W2 employees, eg: "A special tax rule permits some landlords to deduct 100% of their rental property losses every year, no matter how much." Taken in aggregate, tax-wise, it seems FAR better to be a landlord than a W2 employee. (A peer comment noted that 1099 get really great tax treatment, and that's basically the gist of it. If you can claim you are own your own boss - the tax breaks are huge, otherwise for the run-of-the-mill W2 - there are lot less tax breaks).