The cost of the new HVAC will be depreciated for 27.5 years. The calculation method is evenly divided by GDS and ADS cannot accelerate write-offs for this asset.
From ColeenD3:
The labor for the replacement can be an expense for the year. This would include the work to remove the old unit and install the new unit.
This election for items $2,500 or less is called the De Minimis Safe Harbor Election. This election is an option you can take each year that lets you write off items $2,500 or less as expenses instead of assets. Expenses typically reduce your income by a larger amount than depreciating an asset over multiple years does. This means you could get a bigger refund.
If you decide to take this option, a form called De Minimis Safe Harbor Election will show up on your tax return. This election will apply to all your businesses, rental properties, or farms.
Here are the rules you need to meet to take this election:
- You don't have an applicable financial statement (most people don't).
- You have a consistent process for how you record expenses and assets.
- You record these items as expenses on your books/records.
- The cost of each item as shown on your receipt is $2,500 or less.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
