Operating Expense

Operating Expense
Operating expenses refer to the amount paid to maintain a property or run a business, including costs such as property taxes, utilities, and hazard insurance. It excludes financing expenses, depreciation, and income taxes.
Repairs
Repairs refer to work performed to return a property to its former condition without extending its useful life, distinguishing them from capital improvements. In the context of income property, repairs are an operating expense for accounting and tax purposes.

Accounting Terms Lexicon

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