Appliance expenses

Forum|Forum|3 years ago
March 12, 2023
1 reply
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My wife owns an out of state rental property that she bought in May 2022. We needed a new washer/dryer and a refrigerator for the rental property. My father-in-law who lives in the same state as the rental property paid for all these 3 appliances. My father-in-law doesn't own the property. We bought the appliances and put them to use in 2022 after the property was rented on July 1st. Can we deduct the expense of the appliances on our taxes?

Not A Product Question

DoninGA

Employee

Those are Assets for the property that have to be depreciated.

Carl11_2

Employee

Those are Assets for the property that have to be depreciated.

That's only one option. If the cost was less than $2,500 then you have the option to just expense them under the Safe Harbor di-Minimus rules. I myself would go that route so I don't have to deal with the headaches of depreciation recapture when I sell the property, or the remaining depreciation when the next tenant destroys those assets.

Anonymous_

Employee

@Carl11_2 wrote:

If the cost was less than $2,500 then you have the option to just expense them under the Safe Harbor di-Minimus rules. I myself would go that route so I don't have to deal with the headaches of depreciation recapture.......

I agree that would be the route to take but there would be "recapture" in the sense that the asset being expensed has a basis of zero ($0). If sold at a later date, any gain on the sale would have to be reported as ordinary income and taxed at ordinary income tax rates (and, unlike unrecaptured Section 1250 gain, there is no 25% cap).