I have a rental property and replace an appliance (less than $2500) in 2023. As in past year's I've selected the Section 179 for the full amount. On the asset worksheet for the appliance, there is a line, "Elect OUT of Special Depreciation Allowance" which defaults to yes and will not retain a 'no' selection, resulting in the expenditure landing on line 13 of Form 4562 as a Carryover of disallowed deduction to 2024. When I entered the asset through the Step-by-Step screens, it stated that the full amount would be depreciated in 2023. Please advise, it sure seems that I should be able to get the full amount deducted in 2023.
Did you enter any other assets this year? If you elect out of Special Depreciation for any asset, it applies to all assets placed in service this year.
However, since the cost of the asset is less than $2,500, you can take the Safe Harbor Election and report the cost as a rental expense instead of a depreciable asset. The question about Safe Harbor appears at the beginning of the Rental Asset section. Look for the question "Do you want to go directly to your asset summary?" Check the box for "No" and continue to the questions about Safe Harbor.
Thank you for your quick reply PatriciaV, much appreciated! I do not have other assets for 2023. Today when I opened the program, my last attempt at selecting the 'no' selection to the 'Elect OUT' line was retained and the depreciation for the appliance was included as part of the current year depreciation on Schedule E. The detail depreciation schedule has the appliance listed as Section 179, and so all is well.