I think I have read through all of the posts related to this topic and I'm still unclear on my options. Here are the facts: I completed a project (finishing a basement) to improve my rental unit. The total cost of the project was approximately $6,500 but no individual invoice or receipt was over $2,500. I don't qualify for the Safe Harbor for Small Taxpayers because total repairs and improvements exceed 2% of my adjusted cost basis this year. I have two questions:
1. Can I use the De Minimis Safe Harbor for all of the expenses of this project because none of them exceed $2,500 even though the cost of the total project is over that?
2. Am I required to use the De Minimis Safe Harbor for these expenses because it is an all or nothing election, or can I choose to capitalize this as one project?
Thank you for any input.
