Deducting Laptop From Schedule E

4 Replies

Hi, BP

How do we deduct a new laptop on the Schedule E form?

As you may know, each property has a separate column where we can deduct the property's expenses like: Mortgage Interest paid, Taxes and Repairs.

Under what expense would we deduct the cost of a new laptop? Supplies?

Also, since the laptop is being used to service and manage all the properties, under what column/property do we put it in?

Thank you,

Andy

Not sure what your capitalization threshold is, but if it's under that amount any reasonable method of expense allocation should suffice. I usually put my items in supplies or maintenance (or anything else that makes sense) and simply divide it equally to each property. 

You can get more sophisticated and allocate according to gross rent (or something else) if you think it's worth the effort to establish a closer relational basis of allocation.

Originally posted by @Andy R. :

Hi, BP

How do we deduct a new laptop on the Schedule E form?

As you may know, each property has a separate column where we can deduct the property's expenses like: Mortgage Interest paid, Taxes and Repairs.

Under what expense would we deduct the cost of a new laptop? Supplies?

Also, since the laptop is being used to service and manage all the properties, under what column/property do we put it in?

Thank you,

Andy

 Yes, you can if it's under $2500. Make sure you attach de minimus election on your tax return. 

Hopefully, the laptop is 100%. 

Or, if you are subject to QBI income Limitation, it will make sense to capitalize your asset so that your asset basis for QBI deduction goes up. f this goes over your head, talk to tax advisor. 

I sometimes will categorize an expense under one property even though it is used for many.  An example is my PO Box.  Rather than divide $60 up over X-number of properties, I charge the whole amount against one property.  The IRS won't care as long as it's a legit expense because it impacts your tax liability the same as if you divvy it up over multiple properties.  It simplifies things and doesn't materially affect cash flow.  Not sure how much you spent on this lap top, but if under $1000 I'd just put it against one property.  In 3 years, it won't even show up as a blip on the radar.