Skip to main content

How to Track Capital Expenses

Updated yesterday

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

  1. Go to your Transactions page.

  2. Click the “+ Add” button.

  3. Enter transaction details and choose a Capital Expenses category.

Option 2: Edit an Imported Transaction

  1. Hover over the relevant transaction.

  2. Click the pencil icon at the far right.

  3. 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 guidelines

    • Examples 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:

  1. Go to the Transactions page.

  2. Click the “Reports” button.

  3. 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.


​ 

Did this answer your question?