Twenty-seven years ago we bought a rental house, back when real estate costs were low, for $64,000 (unadjusted basis of $57,430). This year we needed to install some new carpet to get the house ready for a new tenant. Am I to understand that we cannot take advantage of the de minimis safe harbor deduction because, since 2% of our unadjusted basis is only $1148, and the carpeting (for 2 different rooms purchased on two different dates) came to $1287, we are over the threshold for using safe harbor? If so, what is our best option for reducing our income this year? Section 179? The 80% special depreciation?
