Yes, Tara, you are close to correct.

You obviously get to write off the tile today. At your death, the land gets a stepped up basis and tile is appraised at market value (not sure that is the proper term.) Often the value of the tile system may be higher then than today since it has such long expected life and the cost keeps going up.

So, if you add your state and federal brackets and your heirs tax brackets, it is fairly common for the tax savings to cover 2/3 to 3/4 the cost of the tile. After we explain this to customers, most of them step up their tiling plans.

One of the latest twists is to sell equipment at retirement and replace it with tile. You avoid selling the equipment at one of your highest taxable years but replace it with an investment that will pay consistent dividends.

I just love going to my tax advisor with these ideas. He is always looking for ways to help other clients with similar tax challenges.