topic I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs. in Investors & landlords

I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

pearl12970 — Tue, 30 Jul 2019 03:31:25 GMT

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

DoninGA — Tue, 30 Jul 2019 11:08:50 GMT

Appliances are rental assets to be depreciated. On the Rental Summary screen add the appliances as an asset.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

pearl12970 — Tue, 30 Jul 2019 19:35:27 GMT

I thought you can deduct appliances (assets) under $2,500 if you purchased it for a rental , based on the new 2018 Tax rules? I don't know where and how to deduct it.

Under rules that go into effect for tax year 2018, you can also deduct more expenses under a section of the tax law known as Section 179. Under the new rules, you can do this with up to $1 million in new property used for certain allowable business uses, including providing lodging to your tenants. This property can include appliances, such as refrigerators, and furniture, such as beds.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

Carl — Tue, 30 Jul 2019 21:45:40 GMT

For rental property assets, they are normally capitalized and depreciated over time. Appliances would be depreciated over 5 years. However, for qualifying assets that cost less than $5000 you have the choice to either capitalize and depreciate, or to just deduct the full cost as an expense in the year of purchase. Appliances that cost less than $5000 qualify to be expensed.

When working through the rental expenses section, the very, very, very *VERY* last screen of that section is for miscellaneous expenses not covered in other expense categories. Just enter your appliances there and the cost, click Continue and press on.

Overall, depreciating the appliances over 5 years will have minimal affect on your tax liability (if any at all due to every increasing carry forward losses) so I suggest you just expense them. That way, the expense is carried forward and unlike depreciation does not have to be recaptured when you sell the property in the future.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

pearl12970 — Tue, 30 Jul 2019 22:07:22 GMT

Thank you Carl.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

pearl12970 — Thu, 01 Aug 2019 23:50:34 GMT

Carl,

I had paid delivery charges . Should I include the cost with the appliances or list it separately?

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

Hal_Al — Fri, 02 Aug 2019 18:04:38 GMT

See

https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

dkashlan — Wed, 22 Sep 2021 16:05:23 GMT

Can you deduct the new appliance if bought to replace a damaged appliance due to tenant abuse?

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

Critter-3 — Wed, 22 Sep 2021 20:59:29 GMT

Of course ... if you have the old appliance listed as an asset then you need to retire the old asset and enter the new one.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

dkashlan — Wed, 22 Sep 2021 21:04:56 GMT

Remember, this appliance was damaged due to tenant abuse. The tenant claims it is a depreciable asset and since it exceeded the allotted 5 years depreciation by the IRS, then I should have it changed anyway.

Thanks, in advance.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

Critter-3 — Wed, 22 Sep 2021 21:14:10 GMT

What the tenant says/does is immaterial. You have 2 steps to take.

You have an asset in the rental that you will get rid of for a price even if that price is zero.

Then you enter the new asset into the system to be depreciated or expensed.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

dkashlan — Wed, 22 Sep 2021 21:28:37 GMT

But wouldn't the IRS object if the replacement took place, not for normal wear and tear rather due to premature interruption of the useful life expectancy of the appliance? In other words, why not make the tenant pay for the replacement instead of me buying a depreciable replacement appliance and depreciate it over 5 years? Wouldnt the IRS frown upon me if I did not try to recover the cost of the abused appliance first? Thanks,

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

yupod — Wed, 12 Jan 2022 03:53:46 GMT

It is my understanding that for a "plain vanilla" rental property one is unlikely to qualify as a business and therefore would not be able to claim de minimis election. That is because one is unlikely to spend 250hrs/y actively managing single-family rental where tenants tend to stay 1y+.

That being said, why would it be ok to claim appliances under 2.5K as an expense (unless you qualify for a safe harbor rule that most of the vanilla rental would not)? Am I missing some other provision of the tax code?

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

MarilynG1 — Wed, 12 Jan 2022 04:26:23 GMT

You have the choice of claiming appliances as either a Depreciable Asset or as an Expense in the current year for new items.

See post from @Carl above for more discussion on this.

"Overall, depreciating the appliances over 5 years will have minimal affect on your tax liability (if any at all due to ever increasing carry forward losses) so I suggest you just expense them. That way, the expense is carried forward and unlike depreciation does not have to be recaptured when you sell the property in the future."

Click this link for more info on Depreciation vs. Expenses.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

yupod — Wed, 12 Jan 2022 04:38:57 GMT

I do prefer to claim as an expense vs depreciating over 5y as it will help to offset the profit (depreciation on my property is not enough to offset the rent). However, I still struggle to establish why would I be eligible to claim a fridge as an expence. If it was under the safe harbor, I would have to first qualify to the safe harbor by dedicating 250h/y of being directly involved. That is really a lot of time when it comes to single-family rental.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

Hal_Al — Wed, 12 Jan 2022 12:45:25 GMT

The 250 hour rule governs whether you can claim your rental as a "business" for purposes of claiming the new (staring in 2018) QBI (Qualified Business Income) deduction.

There is no 250 hour rule for being able to deduct a new asset, under $2500, as an expense. You may deduct the the cost of a new refrigerator as an expense.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

Carl — Wed, 12 Jan 2022 14:14:17 GMT

I would have to first qualify to the safe harbor by dedicating 250h/y of being directly involved.

That has nothing to do with this. If the cost is less than $2,500 you can expense it. Generally, this can not be applied to that which becomes a permanent and material part of the structure. An appliance such as fridge, washer and dryer do not become such.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

yupod — Thu, 13 Jan 2022 03:40:26 GMT

Thanks! super helpful. To reconfirm, I would still need to do an explicit election for the "Safe Harbor for Routine Maintenance" in TT?

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the e...

ThomasM125 — Thu, 13 Jan 2022 04:06:43 GMT

@yupod

Yes, you do need to make the Section 1.263(a)-1(f) election for de minimis safe harbor each year you choose to expense assets that cost under $2,500. TurboTax will ask you if you want to take the election when you enter your assets and if so, will include the election notice with your tax return.

Re: I purchased a new refrigerator and washer/dryer for my rental property. How do I deduct the expense? I didn't see an option to include new purchases just repairs.

Vlad032 — Sat, 22 Jan 2022 02:37:34 GMT

Off the subject: Tenants should not dictate or get involved into your business (taxes, etc).

I hope you got a better ones.