Rental Assets

[mmetzger]

Hi,

I made two improvements to my rental property last year.  I added a minisplit air conditioner for the house and added gutters. Since these are both assets that will be depreciated, I trying to figure out which category to select so I can enter expense. Three options: A. Residential real estate B. Appliances carpet furniture C. Land improvements.

Thank you

[Carl]

Since the improvements are "a material part of" the structure they are classified as residential rental real estate and depreciated over 27.5 years.

If the improvements were less than $2,500 then you can elect to expense them under the safe harbor de-minimus act. For a brief explanation see https://www.landlordstudio.com/blog/3-irs-safe-harbors-landlords-need-to-know-about