Expensing furniture and fixtures for a Short-Term Rental sold in 11 months from purchase.

[JimmBurton]

We bought a property to use as a short-term rental and later sold it after 11 months. How do I account for tax purposes, furniture bought and sold with the property? We sold it as furnished and didn't break out a separate line item for the furniture. The house itself was sold at a loss.

[AmyC · Accepted solution]

It depends.

• Furniture bought and sold with the property - the property came with the house and was included in the basis.
• Furniture bought separately and then sold with the property - Normally, you would depreciate the furniture. 
  • If you did begin depreciation, you will need to dispose of the assets. 
  • If the furniture was purchased the same year as sale, increase your cost basis by that amount. 

See Pub 527

[JimmBurton]

Thanks, Amy. 

That looks like just what I was searching for. I appreciate your efforts.