Solved: I replaced a fridge and stove for rental property for $1000 + $75 installation. Over all is it better to consider these as an annual expense rather than long term asset?
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CL6
Level 1

I replaced a fridge and stove for rental property for $1000 + $75 installation. Over all is it better to consider these as an annual expense rather than long term asset?

 
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Carl
Level 15

I replaced a fridge and stove for rental property for $1000 + $75 installation. Over all is it better to consider these as an annual expense rather than long term asset?

So your total cost is $1,075. Since it's not "a physical part of" the property and costs less than $2,500 you can expense this. Make sure you expense each item separately, and you can divide the installation costs between the two however you desire. It makes more sense to just expense this, because depreciating an appliance that costs less than $1000 over 5 years "Might" reduce your tax liability by a "whole" dollar each year  if you're lucky. No depreciating it is just not worth the time or effort. By expensing it, you don't have to deal with "asset disposition" when the appliance(s) need to be replaced again.

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2 Replies
Carl
Level 15

I replaced a fridge and stove for rental property for $1000 + $75 installation. Over all is it better to consider these as an annual expense rather than long term asset?

So your total cost is $1,075. Since it's not "a physical part of" the property and costs less than $2,500 you can expense this. Make sure you expense each item separately, and you can divide the installation costs between the two however you desire. It makes more sense to just expense this, because depreciating an appliance that costs less than $1000 over 5 years "Might" reduce your tax liability by a "whole" dollar each year  if you're lucky. No depreciating it is just not worth the time or effort. By expensing it, you don't have to deal with "asset disposition" when the appliance(s) need to be replaced again.

View solution in original post

CL6
Level 1

I replaced a fridge and stove for rental property for $1000 + $75 installation. Over all is it better to consider these as an annual expense rather than long term asset?

Thanks, Carl. This is what I suspected but didn't know how the calculations worked out. Appreciate the response.
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