The annual election to expense items under $2,500 applies to all of your rental properties, but it does not interfere with capital improvements like your $5,700 central A/C.
Here's how it works:
- If you elect to expense the $750 appliance, TurboTax will apply this election to all qualifying purchases under $2,500 across your rental properties.
- Capital improvements, like your A/C unit, are not affected because they exceed the threshold and must still be depreciated over 27.5 years.
- So, you can expense the appliance without worrying about it impacting the depreciation of your A/C unit. Just make sure you have a consistent process for recording expenses and assets, as TurboTax suggests.
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