what depreciation category to use when reframing dining room and drywall/texture?

[jeannie1122]

Hi, tenant moved out and I made improvements such as tearing down dining room wall & closets, reframing and drywall. If each cost less than $2,500, can I expense them this year?

If I need to depreciate them, would it fall under "residential rental real estate" or "appliances, carpet, furniture"? 

[tagteam]

You can expense the costs provided each invoice is $2,500 or less (under the de minimis safe harbor).

[jeannie1122]

If I expense it, then I would not list it as an "asset" to depreciate but instead it would fall under "miscellaneous" for expenses? 

[tagteam]

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@jeannie1122 wrote:

If I expense it, then I would not list it as an "asset" to depreciate but instead it would fall under "miscellaneous" for expenses? 

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Yes, exactly right.

[Carl]

If you choose not to expense it, but to depreciate it instead, then it's classified as residential rental real estate and depreciated over 27.5 years. I myself would expense it, if the invoice cost was less than $2,500. Just keep in mind that when you expense it, there is absolutely no change of of your cost basis in the property.