I remember someone telling me that the new tax code lets you write-off furniture that you buy for properties under the "hospitality" category (ie. short term rentals). Can someone point me in the right direction and explain any nuances relating to this part of the code? I am looking to upgrade my furniture for my air bnb units and I'm trying to figure out the most cost-effective way to do this.
What they might be talking about might be that going forward We can take section 179 deduction on the purchase related to lodging. We are still waiting on more guidance on that.
But, even without that new provision, you should be able to write 100% of your purchase under bonus depreciation.
Also, section 179 is limited to income so most of the small RE invertor might have problem using it even if they could.
Research more on 100% bonus depreciation.
@Ashish Acharya thanks for the information. I'll do some more digging on 100% bonus depreciation and section 179.
@Logan Fast , Most 1245 assets (Not the building) purchased after September 27, 2017, are eligible for bonus depreciation. Depending on your situation, and when you purchased the property, it could be worth doing a cost segregation study to maximize the bonus depreciation allowable. Feel free to PM me to discuss your personal situation.
The properties should qualify for section 179 or bonus depreciation allowing you to write off the amounts in the first year.
I believe only 50% of your furniture cost is a write off in the first year and the rest is depreciated over 60 months or so.