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PaulR1
Level 2

Air conditioner for rental property is now deductible under cat 179. If there are losses on these properties because of it, does it make sense to only do a partial 179?

I read on several tax blogs that air conditioners are now acceptable for section 179 deductions.  I own 5 rentals but even with property managers I have had to deal directly and pay these AC services, for 2 central AC units this year. But if I take 100% under 179, these will have a loss and I am not sure if I should do a partial 179 for both since I don't know what happens to the excess loss.  I don't understand how bonus depreciation fits into this and how it is different.  I own the properties but have no LLC or corp or anything, so I assume that means I am a sole proprietor and qualify?

2 Replies
JulieR
New Member

Air conditioner for rental property is now deductible under cat 179. If there are losses on these properties because of it, does it make sense to only do a partial 179?

Yes. You can elect to take a Section 179 expense deduction on all or part of an asset and depreciate the rest.  Also, as one who owns rentals, you are not considered a sole proprietor unless you actually operate a company in the business of renting properties.

PaulR1
Level 2

Air conditioner for rental property is now deductible under cat 179. If there are losses on these properties because of it, does it make sense to only do a partial 179?

Thanks for the answer Julie.  I have 5 rental properties, but have not incorporated or anything. What exactly qualifies as sole proprietor though?  I thought that mean making decisions on the properties, like I do.  And how to do the depreciation of the rest?  What depreciation schedule? ex 5 yrs etc?   What happens if I depreciate the whole thing instead?  Doesn't it carry forward to next year anyway?
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