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daweigedavid
Level 2

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

I have a multiple rental properties, and if I purchase a battery power drill ($50) and use it to repair and maintain multiple rental properties, is this drill an expense or should a depreciate it over multiple years? Does the de minimis safe harbor applies to this situation?

 

And since I used it on multiple properties, what should I do about it?

 

Since I do a lot of repair myself I purchased a lot of tools, such as screwdriver, multimeter, lawn mower, saw, etc each cost less than $2,500.

2 Best answer

Accepted Solutions
tagteam
Level 15

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

You can expense (deduct in their entirety) such low-cost items provided they are used 100% for use in your rentals.

View solution in original post

tagteam
Level 15

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

 

Generally, materials and supplies, etc., costing $200 or less (formerly $100), could always be expensed as an administrative convenience if used for business purposes. 

View solution in original post

4 Replies
tagteam
Level 15

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

You can expense (deduct in their entirety) such low-cost items provided they are used 100% for use in your rentals.

daweigedavid
Level 2

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

Thank you @tagteam. It is great that I can expense it. Is it because of the de minimis safe harbor election?

 

Thanks!

tagteam
Level 15

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations

 

Generally, materials and supplies, etc., costing $200 or less (formerly $100), could always be expensed as an administrative convenience if used for business purposes. 

daweigedavid
Level 2

Should I expense or depreciate a tool that was purchased and used for repair (let's say a drill)?

Awesome. Thank you so much!

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