Safe Harbor for small taxpayers

[DanCarrier]

I have two rental properties. Each had improvements in 2023 that cost less than $10,000, but more than $10,000 if you add the improvements together.  Can I take the $10,000 Safe Harbor of each property, or do I have to combine them? Different types of project: selective flooring replacement in one, selective window replacement in other.

[MinhT1]

Yes. You can use the Safe Harbor for Small Payers limit of $10,000 for each property. But it can't exceed 2% of the unadjusted basis of the building.

This limit of $10,000 or 2% of the unadjusted basis of the building, whichever is less, is determined on a building by building basis—for example, if you own two rental homes, you apply the limit to each home separately.