De minimus Safe Harbor
Hi everyone -
I purchased my first property last year and I'm starting to put together my taxes for the year. I purchased the property in May and repaired it over a couple of months before placing it into service in July. I'm working on establishing the cost basis and how the de minimus safe harbor effects this. Reading through the NOLO book, it states that any expenses that occur before the property gets placed into service needs to be added to the cost basis of the property. This is unless the expenses can be deductible under the de minimis safe harbor.
Does this apply to all supplies and materials that are under $2500? i.e. all paint, screws, electrical switches, sinks, etc? Also, for any items over $2500 that were installed before the in service date, do they have to be depreciated over 27.5 years along with the property? Or can those still be broken out and depreciated over the time as stated by the IRS?
Thanks!