Short term rental-furniture

Forum|Forum|4 years ago
October 15, 2021
1 reply
3 views

Does the cost of furniture and furnishings for a short term rental incurred before the property is available to rent get added to the cost basis of the property? I understand that once the property is listed for rent, these costs can by depreciated.

AmeliesUncle

Level 15

No, you depreciate them as separate assets apart from the building.

jimmy72Author

Level 2

So then I also have the option of expensing the costs in the first year using de minimis safe harbor or safe harbor for small taxpayers?

tbrown21

Level 4

not in first year. You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use. That means you can use de minimis safe harbor or safe harbor for small taxpayers on the date you put the property available for rent. Suggest you check out pub 527. Link:

https://www.irs.gov/publications/p527#en_US_2020_publink[phone number removed]