I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

[DoninGA]

Appliances are rental assets to be depreciated.  On the Rental Summary screen add the appliances as an asset.

[pearl12970]

I thought you can deduct appliances (assets) under $2,500 if you purchased it for a rental , based on the new 2018 Tax rules? I don't know where and how to deduct it.

Under rules that go into effect for tax year 2018, you can also deduct more expenses under a section of the tax law known as Section 179. Under the new rules, you can do this with up to $1 million in new property used for certain allowable business uses, including providing lodging to your tenants. This property can include appliances, such as refrigerators, and furniture, such as beds.

[Carl]

For rental property assets, they are normally capitalized and depreciated over time. Appliances would be depreciated over 5 years. However, for qualifying assets that cost less than $5000 you have the choice to either capitalize and depreciate, or to just deduct the full cost as an expense in the year of purchase. Appliances that cost less than $5000 qualify to be expensed.

When working through the rental expenses section, the very, very, very *VERY* last screen of that section is for miscellaneous expenses not covered in other expense categories. Just enter your appliances there and the cost, click Continue and press on.

Overall, depreciating the appliances over 5 years will have minimal affect on your tax liability (if any at all due to every increasing carry forward losses) so I suggest you just expense them. That way, the expense is carried forward and unlike depreciation does not have to be recaptured when you sell the property in the future.

[pearl12970]

Thank you Carl.

[pearl12970]

Carl,

I had paid delivery charges . Should I include the cost with the appliances or list it separately? 

[Hal_Al]

See

https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

[dkashlan]

Can you deduct the new appliance if bought to replace a damaged appliance due to tenant abuse?

[Critter-3]

Of course ... if you have the old appliance listed as an asset then you need to retire the old asset and enter the new one.  

[dkashlan]

Remember, this appliance was damaged due to tenant abuse.  The tenant claims it is a depreciable asset and since it exceeded the allotted 5 years depreciation by the IRS, then I should have it changed anyway.

Thanks, in advance.

[Critter-3]

What the tenant says/does  is immaterial.  You have 2 steps to take.  

You have an asset in the rental that you will get rid of for a price even if that price is zero. 

Then you enter the new asset into the system to be depreciated or expensed.  

[dkashlan]

But wouldn't the IRS object if the replacement took place, not for normal wear and tear rather due to premature interruption of the useful life expectancy of the appliance?  In other words, why not make the tenant pay for the replacement instead of me buying a depreciable replacement appliance and depreciate it over 5 years?  Wouldnt the IRS frown upon me if I did not try to recover the cost of the abused appliance first?  Thanks,

[yupod]

It is my understanding that for a "plain vanilla" rental property one is unlikely to qualify as a business and therefore would not be able to claim de minimis election. That is because one is unlikely to spend  250hrs/y actively managing single-family rental where tenants tend to stay 1y+.

That being said, why would it be ok to claim appliances under 2.5K as an expense (unless you qualify for a safe harbor rule that most of the vanilla rental would not)? Am I missing some other provision of the tax code? 

[MarilynG1]

You have the choice of claiming appliances as either a Depreciable Asset or as an Expense in the current year for new items.

See post from @Carl above for more discussion on this. 

"Overall, depreciating the appliances over 5 years will have minimal affect on your tax liability (if any at all due to ever increasing carry forward losses) so I suggest you just expense them. That way, the expense is carried forward and unlike depreciation does not have to be recaptured when you sell the property in the future."

Click this link for more info on Depreciation vs. Expenses.

[yupod]

I do prefer to claim as an expense vs depreciating over 5y as it will help to offset the profit (depreciation on my property is not enough to offset the rent). However, I still struggle to establish why would I be eligible to claim a fridge as an expence. If it was under the safe harbor, I would have to first qualify to the safe harbor by dedicating 250h/y of being directly involved. That is really a lot of time when it comes to single-family rental.