Residential Rental Real Estate just flat out *DOES* *NOT* qualify for the SEC 179 deduction. Period. End of story. (many elements of "commercial" rental property does qualify for SEC 179 - hence that's why you have the question.) At best, a residential rental asset may qualify for the 50% special depreciation allowance,
In your specific case, the improvement does qualify for the 50% Special Depreciation allowance. (SDA). But I can tell you right now that it will "NOT" make one single penny of difference to your tax liability. So I would suggest you not waste your time with it. You should instead depreciate it over the standard 27.5 years.
Remember, rental property practically always operates at a loss "on paper" at tax filing time, with ever increasing losses that just get carried over year to year. So any form of accelerated depreciation on the property "will" *not* *help" tax-wise in any way, shape or form. But it *will* hurt tax-wise if you sell the property before reaching and passing that 50% mark of the normal 27.5 year MACRS depreciation.
Additionally, even though this property improvement cost you less than $2,500, it does not qualify for the safe harbor act, since there is no question that it is "in fact" a permanent and physical part of the real estate property now.
