How do I enter my rental unit replacement windows?

[shocker]

I have one rental unit (townhouse worth about $210, 000). I file as an individual on a 1040 with Schedule E.

My 2023 income was as follows:

Primary job $130,000

Rental income $10,000

Capital gains from selling stock $5,000

I purchased the replacement windows for $7,000 in November 2023. The windows were delivered/installed in January 2024.

1. Do I use the purchase date or the installation date?

2. Do I enter this as "Residential Rental Real Estate" asset in TurboTax? (as opposed to "Land improvements" or "Appliances, carpet, furniture" or somewhere else completely different)

3. Can this be deducted in any manner other than straightline 27.5 year depreciation? (special, 179, etc.)

Thanks in advance.

[ThomasM125]

You can only start depreciating the asset on the date it was put into service, so that would be in 2024 in this instance. It would be residential rental real estate and depreciated straight line over 27.5 years. Since the property is residential there would be no way to use bonus or accelerated depreciation on it.

[mamaclare]

Can one take a 179 special deduction for this if they are an active participant in the property? 

[AnnetteB6]

No, not unless you are in the business of renting property or your rental property is a commercial property.  

See the following information from TurboTax help content related to Section 179 deductions:

Deduct the Full Value This Year

Taking the Section 179 deduction allows you to deduct the entire value of the item this year (rather than writing it off over several years).

If your business is showing a profit, claiming the Section 179 deduction might work to your advantage. The additional deduction will reduce your profit this year, which means you will pay less in taxes and keep more money in your pocket. You might prefer that to saving money over a few years to come.

Keep in mind, though, if you take the Section 179 deduction on this item, the IRS says you'll need to continue using the item more than 50% of the time for your business. If business use of the item drops to 50% or less during the life of the item (the number of years you would be depreciating it if you hadn't taken the Section 179 deduction), the IRS will retroactively deny your Section 179 deduction. As a result, you'll be required to recapture the deduction; that is, declare it as taxable income.

Note:

Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business), and property that produces royalties, does not qualify. For example, residential real property may qualify for Section 179 depending on the nature of the trade or business it is used in.
 

@mamaclare