Air conditioner for rental property is now deductible under cat 179. If there are losses on these properties because of it, does it make sense to only do a partial 179?

Forum|Forum|6 years ago
June 3, 2019
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I read on several tax blogs that air conditioners are now acceptable for section 179 deductions. I own 5 rentals but even with property managers I have had to deal directly and pay these AC services, for 2 central AC units this year. But if I take 100% under 179, these will have a loss and I am not sure if I should do a partial 179 for both since I don't know what happens to the excess loss. I don't understand how bonus depreciation fits into this and how it is different. I own the properties but have no LLC or corp or anything, so I assume that means I am a sole proprietor and qualify?

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JulieR

Yes. You can elect to take a Section 179 expense deduction on all or part of an asset and depreciate the rest. Also, as one who owns rentals, you are not considered a sole proprietor unless you actually operate a company in the business of renting properties.

PaulR1Author

Thanks for the answer Julie. I have 5 rental properties, but have not incorporated or anything. What exactly qualifies as sole proprietor though? I thought that mean making decisions on the properties, like I do. And how to do the depreciation of the rest? What depreciation schedule? ex 5 yrs etc? What happens if I depreciate the whole thing instead? Doesn't it carry forward to next year anyway?