Question

Furniture purchased for rented space

Forum|Forum|1 year ago
May 12, 2024
1 reply
0 views

The two members/partners of an LLC purchased about $2500 in furniture used in rented space for their salon services. Does the furniture (chairs, sofa, countertops) need to be entered on Form 1065 as a fixed asset or as an expense. If an expense, I am not sure where on Line 21 to report it. If we have to record each piece of furniture as a fixed asset, it would seem it can be written down using Section 179.

Thank you in advance.

M

Mike9241

There is a safe harbor for business expenses. It is $2500. That means you no longer have to “capitalize and depreciate” anything you buy for your business (computer, furniture, etc.) over time, so long as each individual item costs less than $2,500. You can simply deduct it all (“expense it”) the year you buy it.

Nothing requires expensing these items. Consider a business that doesn't make much profit in year 1 or even has a loss but expects the following years to be profitable. It could be that even after taking into account the time value of money, sometimes it can be more beneficial to take the write off as depreciation over a number of years. Considering the small amount, I would probably just expense it. But it's a decision to be made by both of you.

There is a requirement (kind of stupid but the IRS wants it). I'm not familiar with TT for Business but the 1040 has the election so I would think it would be in the app. if not

The Taxpayer elects Section 1.263(a)-1(f) De Minimis Safe Harbor Election for 2024

LLC name _________________

Address __________

EIN __________

for line 21

Furniture and equipment - Section 1.263(a)-1(f) De Minimis safe harbor election

if that won't fit then

Furn. & Equip. Safe Harbor Election