Will I still depreciate my vehicle expenses, or will those also then be considered regular expenses (under $2500) ?
Vehicle use for a rental is a completely different ball game. You deal with that in the Vehicle Expenses section. Since I seriously doubt the vehicle will be 100% business use, you have to use the per-mile method of deduction/depreciation. If you'll be spreading 1 vehicle across multiple rentals, you're begging for a never ending nightmare from which you will never awaken. Reporting the disposition of that vehicle in later years is going to give you permanent brain damage in the future. You'll also find that vehicle expenses is so minuscule compared to the other expenses, you'll wish you had never done it.
Consider yourself warned. 🙂
The $200 rule I mentioned came from the IRS website:
That has absolutely nothing to do with assets. It's talking about those things purchased and used to maintain or repair something, including an asset.
Example: you put a completely new central A/C in the house. That's gonna cost you around $5,000 or more. It also adds "real" value to the property. It gets capitalized and depreciated over time.
Three years later the fan motor burns out. You have a new fan motor installed at a cost of $500 for both the labor and the new motor. That's a repair expense. Replacing the fan motor does not in any way add value to the property. It simply maintains value by returning the A/C to it's designed and intended function prior to the event that caused it to no longer function the way it was designed and intended. If you did not fix the fan motor and were selling the property, there's no doubt you will get less money for the property with a non-functioning A/C.
