Deducting new appliances - Owner occupied duplex

[Tyler Melso]

This is my first year filing taxes as a home owner since my wife and I bought our first duplex in 2018. We owner occupy one of the units and rent out the other. I've been reading a lot about how to deduct all of our expenses but I have something concerning the purchase of new appliances I was hoping someone could clarify for me. 

Shortly after purchasing the duplex we bought 2 new refrigerators, one for the unit we live and and one for the rental unit, as well as a washer/dryer which we have put in the shared basement. I'm currently using Turbo-tax and I'm entering in these new appliances as assets. It is saying I cannot enter the full price of the asset since we only rent out a "portion of the property". So it tells me to find the rental percentage using the rental unit's sq ft vs sq ft of the entire property. In this case it is just under half of the total sq footage, so am I correct to enter in roughly half of the purchase price of these appliances as the total cost of the asset? Also, am I correct that even though one of the refrigerators we bought was for our own usage in the unit we live in we can still claim it as an asset towards the rental property?

One last thing, I'm given the option to deduct the full amount of these assets on this year's taxes or take them as a depreciation over the next few years. These appliances were not overly expensive, the most we spent on any single item was about $500 so it seems better to just take the full deduction rather than depreciating something that isn't very expensive in the first place. Does anyone think it is better to take the depreciation?

Thanks in advance!

[Ashish Acharya]

Originally posted by @Tyler Melso:

This is my first year filing taxes as a home owner since my wife and I bought our first duplex in 2018. We owner occupy one of the units and rent out the other. I've been reading a lot about how to deduct all of our expenses but I have something concerning the purchase of new appliances I was hoping someone could clarify for me. 

Shortly after purchasing the duplex we bought 2 new refrigerators, one for the unit we live and and one for the rental unit, as well as a washer/dryer which we have put in the shared basement. I'm currently using Turbo-tax and I'm entering in these new appliances as assets. It is saying I cannot enter the full price of the asset since we only rent out a "portion of the property". So it tells me to find the rental percentage using the rental unit's sq ft vs sq ft of the entire property. In this case it is just under half of the total sq footage, so am I correct to enter in roughly half of the purchase price of these appliances as the total cost of the asset? Also, am I correct that even though one of the refrigerators we bought was for our own usage in the unit we live in we can still claim it as an asset towards the rental property?

One last thing, I'm given the option to deduct the full amount of these assets on this year's taxes or take them as a depreciation over the next few years. These appliances were not overly expensive, the most we spent on any single item was about $500 so it seems better to just take the full deduction rather than depreciating something that isn't very expensive in the first place. Does anyone think it is better to take the depreciation?

Thanks in advance!

 No, you cannot deduct the cost of the refrigerators that you bought for your unit, it's a personal expense. Only the one you bought for the rented unit. 

Yes, you can elect out of the 100% bonus depreciation (That would make you elect out of all other purchase in the same class), and take the deduction over the years, but most of the time people wouldn't do that. 

It would be advisable to do that if you expect a loss from your rental before taking a deduction and other factors such as you are already over the 25k passive loss limitation ( meaning you AGI is above 150k). 

Deducting it in the year of the purchase is most likely beneficial for you if you have net income from the rental unit.