I have a rental and I had to put a new AC unit in. The cost was $4,400. Did i have to send them a 1099? It was a replacement for the original AC that died.

[user4661125]

Do I use the cost as an expense in 2016 or do I depreciate it?

[philipsoo2002]

Answer on screen shot #5 and step 12 do not match.  Is the AC considered Residential Rental Real Estate or Appliance, carpet, furniture?

[IreneS]

No - You do not have to issue a 1099 unless you have several rental homes and are in the business of renting houses.

Since the AC unit is a major purchase and cost $4,400 you have to depreciate it.

To enter the AC as an asset in TurboTax, please follow these steps:

1. Click on Federal Taxes > Wages & Income   [In TurboTax Self-Employed: Business > Continue > I'll choose what to work on.]
2. In the Rental Properties and Royalties section click on the Start/Revisit box.  [See Screenshot 1, below.]
3. On the Income from Rentals or Royalty Property You Own screen click Yes.
4. If you have already started adding information about your rental, you will come to the Rental and Royalty Summary screen.  Click on the Edit box next to the property.  [Screenshot #2]
5. If you have not already entered information about your rental, continue through the screens until you reach Review Your [property address] Rental Summary.  [Screenshot #3] You
6. Click on the Start/Update box next to Assets/Depreciation. 
   
7. If you have already entered assets, you will be asked the question Do you want to go directly to your asset summary?  Mark the Yes button and click Continue.
8. You will be brought to the Your Property Assets screen.  To enter another asset, click on the Add an Asset link.  [You can also Edit and Delete assets you have entered.]
   
9. If you have not yet entered any assets you will see the Depreciation for Your Rental Property screen, click the Yes button and then click Continue.
10. The next 2 screens will ask you if you bought any items for the rental property that cost $2,500 or less and whether you made improvements to the property in 2016.  This relates to the de minimis Safe Harbor election that lets you take these costs as expenses instead of depreciating them. 
    
11. After the election screens, you will come to Describe This Asset.  Mark the button Rental Real Estate Property and click Continue.  [Screenshot #4] 
12. On the next screen, Tell Us a Little More About Your Rental Asset, mark the button next  to Appliances, carpet, furniture and click Continue. [Screenshot #5] 
13. Continue through the screens, entering the requested information.  You will find that the questions fit a residential rental property.