I know that certain expenses on rental property have to be capitalized and not deducted for the year but I have some questions on how to deduct an expense where I purchase materials ($500 of road asphalt) and the labor of repairing pot holes on the rental property is done a no cost because it's done by myself and a friend. Can I just deduct the materials as supplies on the Schedule E tax form? What about the purchase I made of $700 worth of railroad ties and spikes from Tractor Supply and later I hired a contractor company to put them along a low hillside of the property as a sort of a retaining barrier to prevent erosion of a section of the yard by heavy rain. Is that considered an improvement to be capitalized? Would it be both the labor and the supplies or just the labor since I purchased the supplies?