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darrellanned
New Member

I need to take 179 deductions for items for rental property under $2500 but Turbotax H&B won't let me if I click on YES Assets under $2500 or NO over $2500 so now what?

There is no "My Account" tab. The answer I just got doesn't work - I need more steps I guess than - click on Yes purchases were under $2500 as that did not work!

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Accepted Solutions
CathiM
New Member

I need to take 179 deductions for items for rental property under $2500 but Turbotax H&B won't let me if I click on YES Assets under $2500 or NO over $2500 so now what?

If you answer Yes, purchases were under... it gives you the full deduction of the items, but it is not the Section 179 deduction.  It accomplishes the same thing though. You cannot claim a Section 179 deduction for residential rental properties. It's specifically excluded by the IRS. See Publication 946 How to Depreciate Property for more information (there is an exception - see below).

The purchases under $2,500 TurboTax is asking about here is for the election to expense items that would normally be capital improvements but since they are under the IRS threshold of $2,500 you are allowed to expense them.  This is not Section 179 but it has the same result, it is a full deduction from your income.  

Exception to the Section 179 exclusion for rental property:

Property you purchase and lease to others if both the following tests are met.

a. The term of the lease (including options to renew) is less than 50% of the property's class life. b. For the first 12 months after the property is transferred to the lessee, the total business deductions you are allowed on the property (other than rents and reimbursed amounts) are more than 15% of the rental income from the property. 

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1 Reply
CathiM
New Member

I need to take 179 deductions for items for rental property under $2500 but Turbotax H&B won't let me if I click on YES Assets under $2500 or NO over $2500 so now what?

If you answer Yes, purchases were under... it gives you the full deduction of the items, but it is not the Section 179 deduction.  It accomplishes the same thing though. You cannot claim a Section 179 deduction for residential rental properties. It's specifically excluded by the IRS. See Publication 946 How to Depreciate Property for more information (there is an exception - see below).

The purchases under $2,500 TurboTax is asking about here is for the election to expense items that would normally be capital improvements but since they are under the IRS threshold of $2,500 you are allowed to expense them.  This is not Section 179 but it has the same result, it is a full deduction from your income.  

Exception to the Section 179 exclusion for rental property:

Property you purchase and lease to others if both the following tests are met.

a. The term of the lease (including options to renew) is less than 50% of the property's class life. b. For the first 12 months after the property is transferred to the lessee, the total business deductions you are allowed on the property (other than rents and reimbursed amounts) are more than 15% of the rental income from the property. 

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