Purchasing power tools under investment property LLC
Like any good Dutchman I waited until the big box stores had their after thanksgiving sales to buy some much needed power tools for my investment property. I purchased the tools with my investment property LLC credit card and wondered if it is possible and/or favorable to depreciate these assets? I bought a power tool combo set as well as an air compressor set. Any advice is greatly appreciated!
Thanks,
Mark
Most Popular Reply
It's probably more of an administrative pain than it's worth to depreciate them as a fixed asset. It's certainly something you can do and is probably the correct accounting treatment but this is really a judgement call on your part. Unless you bought an air compressor that's commercial grade and over $2,000 or so, it's probably not worth your time. I would just expense them in the current year.
As far as favorable/unfavorable to your current year taxes, it's just a matter or timing those expenses. If you need some of the write-offs this year, then expense them. If not, then you can certainly add them to a fixed asset ledge and depreciate them. Taxes are all a matter of timing.