I purchased a 4-plex in 2020. One of the units was rented from Feb-May. I lived there from June-Sept. Rented out again, furnished, from Oct-Dec.
1. What is the best way to deduct the furnishings for this unit? Is it true that items under $200 are able to be expensed as "supplies" or "other expenses"?
2. A few of the items were $198 before sales tax+shipping. After sales tax+shipping they were over $200. These items could not be expensed as supplies, because their total cost was over $200. Is this true?
3. If I elect to take the de minimis Safe Harbor, would it apply to all of my rentals, or just this one property?
4. If I use the Safe Harbor election, would I have to do so every year?
5. If I take the 100% Bonus Depreciation, how would this affect my depreciation schedule in the future years? Will I add it to the accumulated depreciation?
6. If I take the 100% Bonus Depreciation, would I add it as a separate asset? I currently have each unit (1,2,3,and 4) as a separate asset for this property. Could I lump all the furnishings over $200 together? And would the cost basis be the total price paid for these pieces of furniture?
The 100% bonus depreciation option seems a bit less complicated to me. I am concerned about meeting the requirements for the safe harbor election every year (specifically the 250 hours minimum). Also, because my furnished rental unit was used as my personal residence for over half the year, I think I may be disqualified from using this election.
