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April 6, 2023
Question

De Minimis Safe Harbor with property removation

  • April 6, 2023
  • 1 reply
  • 0 views

I renovated a rental property in 2022.

 

I have many expenses including services, appliances, supplies, etc. I did a few little things myself, and paid several different contractors to do things.

 

Without de minimis safe harbor, my understanding is that I would need to capitalize everything because, even though most of the things done would fall under maintenance by themselves, it was all done together and so is a major renovation. (total expenditure 20-25k)

 

Many of the expenses were under $2500, and in fact many were well under that. There were a few that were over.

 

My question is, would claiming de minimis safe harbor, allow me to expense every item/service that was under $2500, even though it was part of a larger renovation?

    1 reply

    April 6, 2023

    No, you did a major renovation and you should treat it as such.

     

    The things that you did yourself should fall under maintenance since you can only deduct the supplies used for those jobs.  You could separate those out.  The rest of it is treated as one project and capitalized.

     

    @Michael185 

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