Yes, the de minimis still applies to tax filing for 2020.
The de minimis safe harbor is essential to real estate investors because it allows you to immediately deduct certain rehab expenses that would normally have to be capitalized and depreciated. And this ultimately reduces your taxable income.
Typically, you must capitalize and depreciate capital improvements. But the de minimis safe harbor allows you to make an annual election to immediately deduct tangible property (i.e. appliances) under a certain dollar threshold.
If you have an applicable financial statement (AFS), usually an audited financial statement, the de minimis safe harbor threshold is $5,000. However, for most of us without an AFS, the threshold is currently $2,500.
The de minimis safe harbor threshold applies per invoice, or per item should multiple items appear on an invoice. If additional costs such as shipping or installation fees appear on the same invoice, you must use a reasonable method for applying the cost to each item. But, if these costs are on a separate invoice, you don't have to include them.
