Appliances purchased for Rental Property

[Aims173]

Can I use the A de minimis safe harbor election for the appliances purchased for rental property?

If so How do I report this under Pro-Series? Will I need to setup an asset and than check any box to take 100% depreciation? or should I just show the total appliances cost under other expenses in schedule E? 

[DavidD66]

Yes, you can use the de minimus safe harbor to expense appliances bought for a rental property, as long as the appliance cost less than $2,500.  This is a TurboTax forum, not Pro-Series.   You make the election and then you enter the appliances costing under $2,500 each as an expense.  You do not set them up as assets.     

[Aims173]

Thank you so much, but when you say “you make the election”, where do I make this election? Is there a form or check box?

[DavidD66 · Accepted solution]

It is not a form.  It is a written statement that is included with your tax return.  In TurboTax, when you start to add fixed assets the program asks if you have assets that cost less than $2,500.  If you answer yes, the interview continues and you can make the election.  In Pro-Series it is probably a check box, but I don't know where.  

[Jim202010]

What reasons are there to not simplify record keeping this way even if qualified?

If the depreciation on the whole property is still greater than the rental income, will this expense carry over in the loss to the next year and be available once the income is greater than the depreciation?

[PatriciaV]

Yes, if the depreciation creates a net loss, you can carry that amount back to offset previous year's income and also carry any unused loss forward to deduct against future income. Section 179 losses, however, have limitations for recovery.

Passive loss carryovers also apply for rental expenses that exceed rental income. In a year with more income, there may be some benefit from expensing an asset that otherwise would be depreciated.

@Jim202010