I own a small taxi service (sole proprietorship) with just a few vehicles, and I'm confused about which repairs are considered "incidental" and can thus be treated as an expense versus which repairs "add to the property?s value or appreciably prolong its life" and must thus be capitalized. Given that failure to repair, say, a blown head gasket, makes the vehicle inoperable, thereby ending its useful life, one could say that replacing the gasket appreciably prolongs its life. Or do they only mean that repairs that extend the original life of the property must be capitalized? In that case, would putting in a new engine be a repair that should be capitalized?

Also, the previous year, I paid a professional tax preparer to do my taxes, and instead of putting my taxi/vehicle repair and maintenance expenses on line 21 (Schedule C, Part 2 Expenses) under "Repairs and Maintenance," he put them on line 27a "Other Expenses" and entered them in Part V as "Fleet Repairs and Maintenance." Is there any reason my taxi vehicle repairs and maintenance costs should not go on line 21 under "Repairs and Maintenance"?