I am making monthly payment on an asset for my small business. How do I handle tax for this? Depreciate the full value? Or just as much as I have paid this year?

nausherali · ‎June 4, 2019

MinhT · ‎June 4, 2019

If you bought the asset with a credit card or on a loan that you pay off monthly. the IRS considers that you have acquired the asset in full and the counterpart is the amount you owe to the credit card company or the vendor.

Therefore you can enter the asset and depreciate its full cost.

If the asset costs less than $2,500, you can expense the full cost in the year by making the de minimis safe harbor election.

Please read this IRS document for more detail:

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

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I am making monthly payment on an asset for my small business. How do I handle tax for this? Depreciate the full value? Or just as much as I have paid this year?