In-ground and above-ground pools can be depreciated on rental properties. The IRS has established a specific 15-year recovery period for depreciation of in-ground pools. If a proper cost segregation study is performed, the value of the pool will be identified, and it can be properly segregated from the basis of the building itself. In-ground pools are more expensive to install but depending upon the type of structure that is chosen – fiberglass, concrete or vinyl liner – the pool can be used for up to fifty years before its structure will need to be replaced.
The average cost of a concrete pool is $30,000; a fiberglass pool is $31,500, and vinyl liner pools is approximately $25,500. However, it should be stressed that the cost of a pool can vary dramatically by the type of installation that is performed, additional features or amenities that are added, and the location of the installation. Significant work may need to be performed to ensure that the pool can be safely put in, which may involve grading, plumbing installation, pool decking or landscaping.
The IRS does not provide specific guidance on the depreciation period for above-ground pools. However, it is common knowledge that an above-ground pool does not have the longevity associated with in-ground pools. Typical above-ground pools will survive from seven to fifteen years before they must be repaired or replaced.
Swimming Pool Depreciation Life
The liner of an above-ground pool typically lasts from five to nine years. Thus, it is reasonable for a cost segregation study to apply a ten-year depreciation basis to the value of an in-ground pool. Average costs for an above-ground pool are approximately $9,000, but can vary widely with amenity choices, decking and landscaping that must be completed before or after installation.
Similarly, equipment such as water pumps, heaters and filtration systems that are associated with both in-ground and above-ground pools must be repaired or replaced within a limited number of years to ensure proper pool care. The IRS has assigned a seven-year recovery period to equipment associated with pool maintenance and functioning. A cost segregation study can determine the value of such equipment and isolate it from the overall property assessment.