Rental - furniture as an expense vs. capital depreciation

[SimonK]

Have just bought a rental property and am buying furniture (beds, mattresses, sofa, table etc). Should I put the furniture (total expense ~$4-5k) as an annual expense or a capital investment that is depreciated?

Additionally, when I travel by car to visit the property to check on it, should I use the mileage allowance?

[carolineb · Accepted solution]

Since all of the items that you listed probably cost less than $2500 each, you can choose to expense them as Miscellaneous Expenses rather than depreciating them by choosing the De Minimis Safe Harbor, an annual tax election that business owners and real estate investors can make when they file their returns. Under the Expenses section of your Rental property, choose Assets and answer the questions regarding assets that cost under $2500 each, then check the box to take the De Minimis Safe Harbor election for the year. The system will then prompt you to enter the full cost of the furniture items under Miscellaneous Expenses. 

The IRS allows you to claim travel expenses for business tasks that are ordinary and necessary to maintaining your rental business. Collecting rent and maintaining your rentals are examples of ordinary and necessary tasks that would allow you to claim a mileage deduction, which is 67 cents per mile in 2024. 

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[quorumof1]

Hi There:

A deduction this year or waiting until subsequent years is always a bit of an estimating game as to which will save the most taxes.  However, one consideration should be simplicity in that expensing it all in a single year will relieve the paperwork burden of depreciating year after year, so if simplicity is desirable-then that's a vote for expensing.