Investors & landlords

It depends.  The rent and all expenses are entered as residential rental on Schedule E.

• How do I enter my rental income and expenses?

Items such as bedding, towels, sheets, as example is an expense, where as small appliances are likely depreciable assets. Furniture is a depreciable asset as well as the suite itself. Electronics is variable depending on exactly what that is.  It could be an expense or a depreciable asset.

When you say a 'new suite' this assumes you have built a section on your home or a separate unit altogether to rent out to a tenant.

• Depreciable assets are any thing that has more than a one year life. 
  • The suite would have selected as Residential Rental Property and will be depreciated over 27.5 years, no exceptions. This includes the cost of the suite from start to finish.
  • Appliances have a 5 year recovery and has a separate selection specifically for this when entering the assets.
  • Furniture has a 7 year recovery and has a separate selection specifically for this when entering assets. 

You mention the Safe Harbor election which will be described below as well as how to enter it.

De Minimis Safe Harbor Election

This election for items $2,500 or less is called the De Minimis Safe Harbor Election. This election is an option you can take each year that lets you write off/deduct items $2,500 or less as expenses instead of assets. Expenses typically reduce your income by a larger amount than depreciating an asset over multiple years does. This means you could get a bigger refund.

If you decide to take this option, a form called De Minimis Safe Harbor Election will show up in your tax return. 

Here are the rules you need to meet to take this election:

• You don't have an applicable financial statement (most people don't).
• You have a consistent process for how you record expenses and assets.
• You record these items as expenses on your books/records.
• The cost of each item as shown on your receipt is $2,500 or less.
• Rental Property select Edit > Other expenses > Other Miscellaneous Expenses
• Enter Description (Safe Harbor ...) and amount (not entered as assets under this election)

Note:  Because you are under the $2,500 threshold, you are not required to use Section 179.  You can list these expenses under Miscellaneous.  If the amount was over 2,500, then you would enter these as assets and then would be able to choose the Section 179 option.

• Maintain a complete record with your tax return should you need to verify these items at a later time.

@Teymietush