The de minimis election allows you to expense certain items that would normally be capitalized. Here are the responses to the questions you pose in your first and second postings:
Can I still deduct the remaining 4k? And how?
- For the items that are above the $10,000 total you can treat as depreciable assets.
De minimis is a better choice than Section 179
- Using the De minimis election you are taking a one-time expense for the item and that's it. You don't have to worry about recapture.
1) Does it mean I can deduct $4800 of expenses, furniture etc, or that I cannot take advantage of the De minimis at all?
- 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
2) I'm not sure what you mean by "I can offset my active income if I claim active participation in the rental activity"
- If you show a loss on the property, if you "actively participate" in the rental property you can deduct up to $25,000 of the loss.
3) Can i deduct 75% of the furniture expensive in the shared part of the house, or can I deduct only 100% of the furniture in the exclusive guest rooms?
- To stay on the good side of the IRS, deduct 100% of the furniture in the exclusively rented area.
A very good resource for the De Minimis election is the IRS Tangible Property Regulations - Frequently Asked Questions
