@trapezewdc wrote:
Still no answers after one year ?
There are actually two "safe harbors" that may be elected.
The first one has already been mentioned and it applies to certain tangible personal property up to $2,500 per invoice. That would include such items as stoves, refrigerators, washers/dryers, furniture, and like items.
The second safe harbor is the Safe Harbor Election for Small Taxpayers, which applies to certain improvements; the requirements for that are set forth below.
Safe Harbor Election for Small Taxpayers
You are not required to capitalize as an improvement, and therefore may be permitted to deduct, the costs of work performed on owned or leased buildings, e.g., repairs, maintenance, improvements or similar costs, that fall into the safe harbor election for small taxpayers. The requirements of the safe harbor election for small taxpayers are:
- Average annual gross receipts of $10 million or less; and
- Owns or leases building property with an unadjusted basis of less than $1 million or less; and
- The total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-
- Two percent of the unadjusted basis of the eligible building property; or
- $10,000 (for questions about how to calculate the unadjusted basis, refer to "Figuring the Unadjusted Basis of Your Property" in Publication 946.
- You make the election to use the safe harbor for each taxable year in which qualifying amounts are incurred.
