Depreciation 179

Forum|Forum|2 years ago
March 25, 2024
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I purchased a new rental last April and over the summer I replaced a few appliances, one for $720 and another for $690.

I have rental losses in total of $24,600 but I also have a S Corp in which my Schedule E is still a net positive.

Normally I'd just 179 the appliances and move on as depreciating out over five years for $200/yr just doesn't seem worth it.

If I do 179 in this instance then the excess of $25k in losses will simply carry over until next year. Is this a big deal to the IRS (like extra scrutiny) or should I just do the straight line to keep under the $25k max loss amount?

TurboTax Home & Biz Windows

Best answer by PatriciaV

If the appliances were placed in service before 12/31/2023, you may consider taking the De Minimis Safe Harbor Election to expense them fully rather than adding them as rental assets. Generally, for assets costing less than $2,500 each, the Safe Harbor Election is a better choice.

As long as you are renting the property at Fair Market rent for your area, with an intent to make a profit, a loss in the first year shouldn't raise any flags.

PatriciaVAnswer

Employee

As long as you are renting the property at Fair Market rent for your area, with an intent to make a profit, a loss in the first year shouldn't raise any flags.

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