Air BnB bed/bedding assets sold at loss for rental home. How to expense? As supplies?

[Face_in_the_crowd]

I purchased beds and bedding for Air BnB rental home then sold at a large loss when I decided to do unfurnished lease instead. I was told to enter this loss as "supplies". Does that sound right?

[SweetieJean]

So they were never used for that purpose?

[Face_in_the_crowd]

They were purchased specifically for renting the home furnished. I was never able to rent the home furnished. As soon as I was able to find a tenant to sign a long lease (mostly unfurnished), then I sold these items. They were never used (other than for photos to advertise the home).

[SweetieJean]

I'm sure someone else will respond, but furniture used in rentals have a 5-year life starting when they were placed in service.

[SweetieJean]

See OP's other posts:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/users/44547148-spunkdog17">https://ttlc.intuit.com/users/44547148-spunkdog17...>

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3170973-tried-to-rent-home-in-2015-did-not-rent-but-had-startup-co...>

[Hal_Al · Accepted solution]

No, it is not supplies.  The furniture was "placed in service" when it was installed in the home and available for rent, even if it was not actually used. As SweetieJean indicated, the furniture and bedding would normally be depreciated. If the ''assets" were placed in service and disposed of (sold) in the same year, you do not claim any depreciation. You do not claim depreciation in the year the asset was sold. You have a short term capital loss, for the difference between what you bought the assets for and sold them for.

[Face_in_the_crowd]

Items were purchased in 2015 and sold in 2016. TurboTax is asking me about capital loss carryover amounts from 2015. Does that mean that I have to wait until next year's tax return to write off these losses? Also is this short term capital loss supposed to be entered in the TurboTax "personal" section?

[Hal_Al]

deleted

[Hal_Al]

I assume you are working on your 2016 return.
Capital loss carryover amounts from 2015 are not relevant to your question.
The  short term capital loss* on the sale, is entered as the sale of a business asset.

How you handled the purchase on you 2015 return is relevant to how you handle the sale in 2016. If you started depreciation, you have a capital loss, and possibly some depreciation recapture (income). If you deducted the cost, in 2015, you will have to report the sale amount as rental income.

*It will be a long term capital loss if it was in service for more than 365 days.

*

[Face_in_the_crowd]

Working on 2016 return. I never had any revenue from my attempt at Air BnB rental. I never entered anything for 2015 because I had no rental revenue in 2015.

[SweetieJean]

Given all the questions you have asked about rentals last year and this year, you might benefit from using a local professional.  That person can set up your bookeeping and taxes, make sure you comply with legal and zoning requirements, etc.