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margarita-oliver
New Member

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

 
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Accepted Solutions
view2
New Member

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

You can use the The special annual election in the asset section.

This election is an option you can take each year that lets you write off items $2,500 or less as expenses instead of assets. Expenses typically reduce your income by a larger amount than depreciating an asset over multiple years does. This means you could get a bigger refund.

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Anonymous
Not applicable

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

like the building that you can only depreciate 75% of its depreciable basis that would also apply to the appliances as well. but you could expense 75% of their cost in the year acquired.  if the tenants will be using your personal property here's what the IRS rules say:

when you convert personal use property to business use (rental would be business use), the value assigned to the property for depreciation purposes is:

The LESSER of...

the adjusted basis of the property, or
its fair market value
...on the date of conversion.

The next question you may have is...

What is the adjusted basis of the property?

The adjusted basis of the property you purchased for personal use is generally what you originally paid for the property on the date of purchase. For example, if you bought a computer for personal use two years ago for $950, the adjusted basis of the computer is $950, your original cost.

Fair market value:

Generally, except for real estate, which may increase in value, things like computers, printers, and furniture will generally decline in value over time. Therefore, the fair market value of such items will generally be lower than their adjusted basis (your original cost) on the date of conversion.

View solution in original post

4 Replies
view2
New Member

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

You can use the The special annual election in the asset section.

This election is an option you can take each year that lets you write off items $2,500 or less as expenses instead of assets. Expenses typically reduce your income by a larger amount than depreciating an asset over multiple years does. This means you could get a bigger refund.

BowP
Level 2

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

Hi. I'm planning to house hack next year on my 1st property (being a live in landlord and rent out 3 rooms). If I were to buy appliances like fridge, washer, dryer, how do I go about taking the deduction? Can I expense 100%  as my start up cost or am I only allowed to expense 75% since I will be using those appliances. I will also furnishingvthe house with my personal properties i.e. couch, dinning table. How do I take a deduction for the use of personal properties? Thank you so much in advance.

Anonymous
Not applicable

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

like the building that you can only depreciate 75% of its depreciable basis that would also apply to the appliances as well. but you could expense 75% of their cost in the year acquired.  if the tenants will be using your personal property here's what the IRS rules say:

when you convert personal use property to business use (rental would be business use), the value assigned to the property for depreciation purposes is:

The LESSER of...

the adjusted basis of the property, or
its fair market value
...on the date of conversion.

The next question you may have is...

What is the adjusted basis of the property?

The adjusted basis of the property you purchased for personal use is generally what you originally paid for the property on the date of purchase. For example, if you bought a computer for personal use two years ago for $950, the adjusted basis of the computer is $950, your original cost.

Fair market value:

Generally, except for real estate, which may increase in value, things like computers, printers, and furniture will generally decline in value over time. Therefore, the fair market value of such items will generally be lower than their adjusted basis (your original cost) on the date of conversion.

Carl
Level 15

Can I expense small appliances used for rental property, or do I have to depreciate them? The microwave was $204 and the stove was $499.

Hi. I'm planning to house hack next year on my 1st property (being a live in landlord and rent out 3 rooms).

Another alternative is that if you purchase the appliances before you start renting out, is to just add the cost of those appliances to your total cost basis as "a part of" the cost basis of the house. Then you can depreciate the percentage of that total equal to the percentage being rented, over 27.5 years.
Typically when renting real estate (especially if you have a mortgage on it) you will show a loss on paper at tax filing time anyway. So expensing items really doesn't affect your tax liability in the tax year you rent them (for some). But when renting a part of your primary residence that could go either way. So its a good idea to figure it both ways. If expensing the item actually reduces your tax liability, then by all means expense it. If it doesn't, then depreciate it.

 

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