Replace windows replacement for Resential Rental Property after tenant move in

[MM025]

Hi, 

I would like to ask if i replaced the windows that cost $12,000 total and got loan in 2024.

Paid $4000 in 2024

and rest $8000 should be paid in 2025 ( loan will be termed and payoff completely in 2025 )

1) Do I need to use depreciation as assets for $4000 in 2024 and do same in way for $8000 in 2025?

2) I replace Dishwasher and freezer for rental that cost $2000 in total. Can i use "De Minimis Safe Harbor depreciation" and add into "miscellaneous Expense" for deduction on Schedule E as Expenses? Because its under $2500. Again Its for Residential Rental Property  and used for Rental.

I think "Section 179" and "Accelerated depreciation" or "Bonus" is not valid as its residential. It will repeated paper works in Schedule E ( however date will be different) How it should get done correctly for Replacement of windows?

Thanks

[ThomasM125]

No, you will enter the full cost of the windows in the year they were installed. The loan counts as a purchase in the year it is taken out.

Yes, you can use the De Minimis option to expense the cost of the appliances. When you do that, you enter the cost of them as repair expense on your rental schedule E. The deduction won't show up elsewhere when you choose the De Minimis option in TurboTax.

You are correct, you can't choose special or section 179 depreciation deduction on residential rental property.  

[MM025]

Hi.

Thanks for your reply, You mean that I can claims as assets for 2024 the amount of $12,000 in regards of how much partial paid in 2024 and rest are remain in 2025? Is there any document in IRS website that highlighted my situation?

Once i had live session with Tax Advisor mention that I should use Assets as depreciation in what I paid in 2024 and reclaim remaining later in 2025.

and also, Do i have to use this selection under "Describe This Asset" as "Appliances, carpet, furniture"?

How long is the "Asset Class"? 5 years?

Thanks

[AnnetteB6]

Another example that highlights the fact that you claim the total cost at the time of the purchase is for the home itself if you have a mortgage (loan) for the property.  You depreciate the full cost of the property from the time it was placed in service, not just the portion that is paid each year.  

Take a look at the following information from the IRS regarding the basis of assets.  The sentence just after the highlighted text explains it:

Topic no. 703, Basis of assets
 

@MM025 

[MM025]

Thanks for your reply.

May I ask you how or what selection i need to do to add replace windows in TurboTax?

Under assets? Please highlight the each page selection as it confusing.

[MindyB]

Yes, the windows will be input in assets. As my colleagues stated, assets begin depreciating in the year of purchase for the full cost.  The payment of a loan has no impact on income, except the interest paid.  Interest is a deductible expense.

Here are the instructions:

1. Navigate to Federal > Wages & Income > Rental Properties and Royalties (Sch E)
2. Edit the rental using the pencil icon
3. Navigate to Assets, choose pencil icon if you have an asset already set up and are adding more, or choose to Add expense or asset if not.
4.  Now, you will see Your Property Assets with depreciation already computed. Add an asset.  Then, follow the interview to answer details about the cost of the asset.

[MM025]

Thanks a lot.

Can you please confirm that below selection is correct for Windows replacements which we got Loan?

Do I have to add "Cost of LAND"?  I kept it as blank!