How to expense a 179 deduction?

[user8256]

I bought a new HVAC system for my rental property. I'm trying to figure out how to deduct the entire amount in 2021 instead of depreciating it.

From TurboTax Home & Business, I went to Business > Assets/Depreciation, then made the following selection:

Next, I selected that I want to claim the improvement as an expense:

Then, TurboTax told me to "make sure these purchases are entered as other miscellaneous expenses".

Now I can see my HVAC system listed as an asset with a Section 179 selection:

But the part I'm uncertain about is whether I need to go to Business > Expenses and enter the HVAC system here as a miscellaneous expense:

That seems to be what "make sure these purchases are entered as other miscellaneous expenses" was suggesting, but I want to double-check so that I don't accidentally double-count deducting the HVAC system. Thanks!

[ColeenD3 · Accepted solution]

You can't take this deduction for residential rental property. There may have been some confusion because if you also offer services such as meals or cleaning, then it is reported on Schedule C and it is a business.

The law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, makes HVAC costs eligible for expensing under Sec. 179. To be eligible, the HVAC costs must be for nonresidential real property that is placed in service after the date the property was first placed in service.

Also, you mentioned claiming it as an expense. This is the de minimus safe harbor election, not section 179. Your HVAC cost more than the allowed $2,500.

[jmoose]

Now I'm really confused! I also installed a new HVAC ($9,688) and a new A/C Split ($2,800) in 2022 in my existing vacation rental home. I added to my depreciable asset list, I do not meet the qualiications since I made over $10,000, but Turbo tax keeps offering both items to be put in the 179 deduction. Should I choose to depreciate them over 5, 7 or 27 years instead?

[PattiF]

The HVAC and A/C Split are both depreciated for 27.5 years. They are a part of the structure of the building and require the longer depreciation period.

@jmoose