$2500 De Minimis Safe Harbor for jointly owned property.

Forum|Forum|5 years ago
March 25, 2021
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I'm interested in how to apply the $2500 De Minimis Safe Harbor (not the Small Tax Payer, nor the Routine Maintenance Safe Harbors) when there is partial ownership and thus a corresponding percentage share of the expense.

The dollar limit under the De Minimis provision is stated to apply "per invoice" or "per item as substantiated by the invoice". I'm not certain if this implies that the original invoice amount cannot exceed $2500 period (i.e. so if you own 50% then tough luck, you only get $1250 for the safe harbor), or whether that can be interpreted in relation to your share of the invoice (i.e. original invoice could have been $5000, but as your share would be $2500 you are fine to apply the safe harbor).

Thank you

Not A Product Question

Best answer by ColeenD3

IRS statements are straightforward. They don't allow for much in the way of, "yeah, but what if...".

If you decide to take this option, a form called De Minimis Safe Harbor Election will show up in your tax return. This election will apply to all your businesses, rental properties or farms.

Here are the rules you need to meet to take this election:

You don't have an applicable financial statement (most people don't).
You have a consistent process for how you record expenses and assets.
You record these items as expenses on your books/records.
The cost of each item as shown on your receipt is $2,500 or less.

ColeenD3Answer

IRS statements are straightforward. They don't allow for much in the way of, "yeah, but what if...".

If you decide to take this option, a form called De Minimis Safe Harbor Election will show up in your tax return. This election will apply to all your businesses, rental properties or farms.

Here are the rules you need to meet to take this election: