Capital expenses are a key part of real estate investing. Stessa makes it easy to track them for accurate reporting, depreciation schedules, and streamlined tax prep.
What Are Capital Expenses?
Capital expenses are long-term investments in your property—like a new roof, HVAC system, or flooring—that must be depreciated over time instead of being deducted all at once. Unlike regular operating expenses, capital expenses require a few extra details for proper reporting.
How to Add a Capital Expense
You can add a capital expense either manually or by editing an imported transaction:
Option 1: Manual Entry
Go to your Transactions page.
Click the “+ Add” button.
Enter transaction details and choose a Capital Expenses category.
Option 2: Edit an Imported Transaction
Hover over the relevant transaction.
Click the pencil icon at the far right.
Change the category to Capital Expenses or one of its subcategories.
Required Fields for Capital Expenses
When you select a Capital Expenses category, two additional fields will appear:
Date Placed in Service
→ The date the asset was ready for use by a tenant.Useful Life
→ The expected depreciable life of the asset per IRS guidelinesExamples of Useful Life Estimates
Appliances: 5 years
Fences, Roads: 15 years
Most building improvements: 27.5 years
Tip: Use the regular Date field to track when the payment was actually made.
Pro Tip: Talk to your CPA about safe harbor provisions or bonus depreciation options. Some capital expenses may qualify for full write-offs in the year they’re incurred.
Generate a Capital Expenses Schedule
After entering your capital expenses, follow these steps to get a summary:
Go to the Transactions page.
Click the “Reports” button.
Select the Capital Expenses Schedule report.
This report will include:
One row per capital expense
Date Placed in Service
Useful Life
Other relevant transaction info
Note: The Capital Expenses Schedule always includes all capital projects, regardless of the date, since depreciation can span multiple tax years.
You can also access this report via the Tax Package feature when preparing your year-end documentation.