Carl
Level 15

Investors & landlords

If the appliances were already there when you purchased the house, then you would need to reduce your cost basis of the structure by whatever cost basis you use for the appliances.  If you purchased the appliances separately, then there's no need to reduce the cost basis of the house.

You said the appliances were purchased in 2016, and you're converting the property to a rental in 2022. For depreciation, you use the original cost of the appliance, or it's FMV on the date placed in service - whichever is "lower". Since it's obvious the cost basis will be the FMV when placed in service in 2022, you may find this not worth the effort. That oven/stove you paid $800 for in 2016 might only be worth $300 or less when you placed it in service in 2022. Appliances are depreciated over 5 years. That comes out to a measly $60 a year.

Not to mention the accounting headache and additional paperwork and work on your part it creates when it breaks and you need to replace it.

I myself choose not to separate out appliances and the such. My primary reason is because my county assesses a "tangible property tax" every year on anything non-real estate that is used to produce income. I don't need that paperwork nightmare every year.

Not trying to discourage you here. Just giving you my own reality of doing this.