Expensing furniture and fixtures for a Short-Term Rental sold in 11 months from purchase.

Forum|Forum|3 years ago
April 3, 2023
1 reply
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We bought a property to use as a short-term rental and later sold it after 11 months. How do I account for tax purposes, furniture bought and sold with the property? We sold it as furnished and didn't break out a separate line item for the furniture. The house itself was sold at a loss.

Best answer by AmyC

It depends.

Furniture bought and sold with the property - the property came with the house and was included in the basis.
Furniture bought separately and then sold with the property - Normally, you would depreciate the furniture.
- If you did begin depreciation, you will need to dispose of the assets.
- If the furniture was purchased the same year as sale, increase your cost basis by that amount.

See Pub 527

AmyCAnswer

Employee

It depends.

Furniture bought and sold with the property - the property came with the house and was included in the basis.
Furniture bought separately and then sold with the property - Normally, you would depreciate the furniture.
- If you did begin depreciation, you will need to dispose of the assets.
- If the furniture was purchased the same year as sale, increase your cost basis by that amount.

See Pub 527

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