Can I depreciate assets purchased before converting home to a rental?

Forum|Forum|2 years ago
October 5, 2023
2 replies
0 views

In 2020 I bought a home for personal use and purchased kitchen assets (like silverware, pots, pans).

In 2022 I converted the home into a rental property. These kitchen items are now used in the rental.

Can I depreciate these kitchen assets? If so, over 7 years?

Thanks

Best answer by Mike9241

yes you can depreciate them. however, your depreciable basis is the lower of cost or Fair Market Vvalue when you started the rental. by the way the same rule applies to the building.

Mike9241Answer

yes you can depreciate them. however, your depreciable basis is the lower of cost or Fair Market Vvalue when you started the rental. by the way the same rule applies to the building.

Carl11_2

Employee

assets (like silverware, pots, pans).

You don't depreciate such low cost items as that. You expense them based on the lower of a) what you paid for the item, or b) the FMV at the time placed in service. Whichever is lower. For kitchenware, I honestly would not wate my time with either.
Depreciating something like a $25 frying pan over 5-7 years is not going to make any impact what-so-ever on your tax liability.If you depreciate it, then you just create a paperwork nightmare of having to deal with the loss, damage and disposition in the future.

oneacrossAuthor

You can expense an item placed into service in 2022, even though it was purchased in 2020? That sounds great!

Which IRS publication says this?

thanks! @Carl11_2

Anonymous_

Employee

@oneacross wrote:

You can expense an item placed into service in 2022, even though it was purchased in 2020? That sounds great!

Which IRS publication says this?

thanks! @Carl11_2

No IRS publication says that.

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Ademinimis

You expense property in the tax year during which you paid for that property.