Replacing kitchen cabinets and bathroom vanities

[okrandy]

I made a 50% down payment in 2021 for kitchen cabinets and bathroom vanities for a rental property. The cabinets were delivered and installed in 2022.  The remaining cost of these items was paid in 2022.

Can I amortize or expense the 2021 down payment? I can allocate the  amount of the down payment to the kitchen cabinets. The remaining amount to be paid (in 2022) would be allocated to the bathroom vanities and handles similarly on the 2022 taxes. 

Thanks.

[DanP0428]

You can do that or take a safe harbor.  Depends on the amount of money and how you want to do it.

[okrandy]

Thanks DanP0428.

The total is around $5,700.   By safe harbor are you referring to the QBI approach? 

Also have around $1,500 in electrical/plumbing/lighting repair and replacement.  

[LeonardS]

Yes, you can use the safe harbor for replacing the kitchen cabinets and bathroom vanities.  Each item can not exceed $2,500 in order to qualify for the safe harbor.  This would include materials and labor.

@okrandy

[okrandy]

Since the total is around $5,700 it would seem that the safe harbor would be out (more than $2,500).

So I would have to split up and capitalize the cabinets?

[ColeenD3]

You don't split the cost. Once it is purchased, it doesn't matter how you pay it off.