Purchased and investment property this year and purchased new flooring (click vinyl) and a cost of $2300 and an install of $1200. My question is, under the de minimus law can are these consider seperate items and can both be expensed vs depreciated? Or is it seen as a total expense of $3500 and must be depreciated? Thanks!
The De Minimis rule allows for expensing of business purchases of $2500 or less. Since the total cost exceeds that amount, you will need to depreciate. Here are additional rules if you would like further details:
Here are the rules you need to meet to take this election:
- You don't have an applicable financial statement (most people don't).
- You have a consistent process for how you record expenses and assets.
- You record these items as expenses on your books/records.
- The cost of each item as shown on your receipt is $2,500 or less.
If you decide to take this option, a form called De Minimis Safe Harbor Election will show up in your tax return. This election will apply to all your businesses, rental properties or farms.