Thank you @jtax and @Carl.
1. I've decided to not do the de minimis since my invoice groups together heater + install = 3039, and I don't want to take the risk of breaking it up.
2. I've decided not to do section 179 - because I don't want to deal with the hassle of re-capture if I stop renting the house a few years down the road.
3. So, I've decided to go ahead and depreciate it over 27.5 years. To do this, I add a new asset under "Assets/Depreciation." I'm not sure which category to choose from "Rental real estate property", "Computer video", "Tools" and "other". I've chosen "Rental real estate property" for now - and under that, there are 3 options "real estate", "appliances" and "land improvements".
I've read that water heater depreciation is not considered an appliance, so I'm not sure what to do here. Should I choose "land improvements" ? Thanks!
