Hi, thanks for responding and for the information. I definitely think the de minimis safe harbor election will be something we will use. I had read the IRS information you provided but I wasn't sure about the total maximum allowance. If you look at my first point above:
- For Depreciable Assets like appliances and other improvements under $2,500: use the de minimis safe harbor election. Question: it looks like the maximum election allowed is the lesser of $10,000 or 2% of unadjusted basis of property – we bought the house for $169,050 (this excludes the land) so does that mean the most we can write off with the safe harbor election is $3,381?
I had read the IRS information you referenced and I took that calculation from the IRS website:
- The total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-
- Two percent of the unadjusted basis of the eligible building property; or
- $10,000 (for questions about how to calculate the unadjusted basis, refer to "Figuring the Unadjusted Basis of Your Property" in Publication 946
It sounds like a number of our purchases (such as appliances) will be eligible to be deducted immediately under the safe harbor election.... but based on our specific situation above are we limited to $3,381 total of all the eligible items?
- So if we bought 4 appliances @ $1,000 apiece are we only able to write off 3 of them for $3,000? And then use bonus depreciation on the remaining $1,000 ?
- Or.. can we write off up to $10,000?
Thanks.
