Writing tools off on my taxes?

Question

What's up Bigger Pockets?

Just a quick question for you.

I am doing my first fix and flip investment and I'm doing the rehab myself. Can I write the tools that I buy to use in my business off on my taxes?

Thanks in advance for your help.

Ashish Acharya · Answer

Depending on the value of the tool, you might have to depreciate it. But you usually get to write off small tools you use.

Luke Saglimbeni · Answer

@Matthew Ewald

In addition to the above: for future reference.  Assets and their depreciable time frame are found below.  Good luck

https://taxmap.irs.gov/taxmap/pubs/p527-005.htm

Account Closed · Answer

Matthew, I just read this article published by Buildium that talks about tax write offs for property managers.  Now I would definitely talk to a CPA before filing your taxes but this says you can write off what you pay to rent equipment and personal property (tools) that cost under $200.  See article below.

https://www.buildium.com/blog/tax-deductions-property-managers-2014/

Bryan Devitt · Answer

Talk to your CPA but depending on the value and life expectancy you can either write it off or take depreciation on the IRS' schedule basis. Either way, yes, you're getting that off your taxes (not the full amount, you just don't have to pay taxes on them)

Ashish Acharya · Answer

You can just write it off as tools/small tools/ equipments.

Michael Plaks · Answer

There is really no price cutoff, because in the flipping business you can write off pretty much anything immediately. It has different technical name (bonus depreciation, Section 179 etc) but the result is the same: an instant write-off.

Basit Siddiqi · Answer

@Matthew EwaldFor a payment to be a deductible expense it has to be necessary, ordinary and reasonable in your trade or business.Tools for a rehaber/flipper is an ordinary, necessary and reasonable expense and therefore should be deductible.It also looks like it can be currently written off instead of depreciated.

Luke Saglimbeni · Answer

You're welcome hope it helps and good luck.

Matthew Ewald · Answer

@Luke Saglimbeni thanks man that is super helpful. I appreciate your time.

Matthew Ewald · Answer

I just want to take a moment to thank everyone who took the time out of their day to answer my post. I just love how we can get answers to questions from people who do these things day in and day out!

Thanks so much

Matt

Writing tools off on my taxes?

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