Categorization of business supplies that will appreciate in value

[RY30]

Last year I opened an LLC for my side hustle(s).  I was profitable in year 1, and I'm trying to figure out the appropriate way to report a large purchase I made for the business.  

I will keep the details vague, but one of the two primary activities conducted under the business is a website and YouTube channel that feature various items for review and discussion.  I make money on ad revenue, online store and through the buying and selling of the items I used for content.  Most of the items I purchase for content are handled as inventory/sales, as I own them less than a year, on average.  However, there are some items that I buy to keep for ongoing content and comparison.  For example, if one reviewed power tools, one might want to always have a low end and high end version of a tool on hand for comparison purposes.

Here's my question - this past year I made a large purchase ($2500) for an item that will be used in this way and not sold in the near future.  I purchased the item at a good price, and it's something that will likely appreciate in value over the years.

Since this item is unlikely to depreciate, but also unlikely to be sold in the near future, is this categorized as "Supplies"?  Or Misc Expense?

[DavidD66 · Accepted solution]

If the item in question is $2,500 or less, you can expense it.  How you categorize it is more personal preference than anything else.  You could create a category called "Show Props", or "Power Tools", or you can categorize it as supplies or Miscellaneous.    If it is more than $2,500, you will have to categorize it.  You will then have a choice of depreciating it over its useful life, or expensing the entire cost by taking bonus depreciation and/or a Section 179 deduction.  

[RY30]

Thank you David - believe it or not (what are the chances), the item cost me exactly $2499.  If I am expensing this in TurboTax, does it matter if I'm expensing it as "Business Supplies" or "Misc Expenses", etc?

[JosephS1]

As DavidD66 stated, this is or can be a personal preference area.  "Business Supplies" or "Materials and Supplies" are pretty much catch-all topics for which many items will fit in.  If this is something that is or will be a recurring item that will be purchased often you may want to create a specific category under miscellaneous expenses identifying the specific item.

@RY30