Again, FL does not tax personal income. No state tax forms exist for doing so.
Tangible personal property is non-real estate property that you can physically see and touch. As an example, if you are a dentist that runs your own dental practice as a single member LLC, you may own the building that your practice is set up in. IN that building you have dental chairs that cost about $6000 each. Those chairs are tangible personal property. You don't rent them out. But you do use those chairs on a recurring basis in the production of income.
In Florida, 63 of the 67 counties impose a tangible property tax on any non-real estate property used to produce income. This is *NOT* a state imposition on the business owner. It's a "COUNTY" tax. So with TurboTax it's perfectly possible to complete the Florida form DR-405 to report your tangible personal property and pay the property taxes on it *every* *single* *year* it's used in the production of income. This tax is "NOT" paid to the state. It's paid to the county property tax assessor. So it can't be e-filed. The DR-405 has to be mailed or hand delivered to the local county tax assessor's office with payment each year.
So if you have residential rental real estate in Florida, and you break things down so that you are depreciating your appliances separately, as far as the county is concerned those appliances you separated out are tangible personal property.Therefore, any "savings" you may "think" you realize by depreciating the appliances separately, is basically lost *every* *single* *year* in the form of personal property tax paid to the local county.
So those who believe they're saving money by separating out appliances from rental property so they can depreciate them over 5 years, aren't saving a single penny. In fact, they're spending "more" money on taxes than they would if they just leave well enough alone and include the value of the appliances in the rental property that's already depreciated over 27.5 years.
So breaking it down and listing appliances and other things separately from the rental property so you can "depreciate them faster" is just plain nonsense in my book. It makes absolutely no sense. Since rental property almost "always" operates at a loss on paper at tax time, Doing this will not make one single penny of difference to your tax liability.
However, when you sell or otherwise dispose of that asset in a later year, the depreciation recapture "WILL" increase your overall AGI and has the potential to bump you into a higher tax bracket. That's gonna heppen weather you paid tangible property taxes or not. So if you're separating appliances out from your rental property in the state of Florida, welcome to the double-taxable that "you" consented and agreed to, by doing so.
Note that if you run a short term rental in this state (such as AirB&B) there's no getting out of the tangible property tax. If you're registered with the county as a short term rental (and a majority of counties *require* this) then they already "know" you have tangible property in the real estate you're renting out. So if you don't file the DR-405 with the county to report "at least" the beds in the property, you can expect them to come looking for you sooner or later.
