Solved: Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?
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stephen8
New Member

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

For example, if I purchase a computer for $2,600, does the $2,500 amount get deducted in the first year and then the remaining $100 get depreciated over the next several years?

Also: does sales tax and shipping get included in the asset amount for this calculation?

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Accepted Solutions
TaxGuyBill
Level 9

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

No.  If the total cost of the asset (including sales tax and shipping) is over $2500, it does not qualify for the De Minimis Safe Harbor election.  It would all need to be depreciated.

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4 Replies
TaxGuyBill
Level 9

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

No.  If the total cost of the asset (including sales tax and shipping) is over $2500, it does not qualify for the De Minimis Safe Harbor election.  It would all need to be depreciated.

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Critter
Level 15

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

However you could use the 179 deduction instead.
stephen8
New Member

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

Critter#2: Can you clarify? Does that mean that I can choose to take a $2500 deduction in the first year as long as I choose not to depreciate the remaining cost?
Critter
Level 15

Can Assets barely over the $2,500 Safe Harbor amount still get a $2,500 deduction in the first year?

NO ....in lieu of the De Minimis option  you will list it as an asset  and instead of depreciating it over the required number of years you can opt for the 179 deduction instead ... follow the program interview for the directions.
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