We just bought a dishwasher for a rental property and we know that we cannot expense it this year. Our understanding is that this is consider a Capital Expenditure and if gets depreciated over a period of time. Ours question is; is the labor from the handyman also considered a CAPEX? Or can the labor (making the changes to the cabinets and installing the dishwasher) be deducted this year…. Thank you everybody!
Any expenses incurred to place the asset into service are included in the capitalized assets cost. So it will end up on your depreciation schedule. Be sure to determine if you are eligible for special depreciation or Sec. 179 expense on any CAPEX assets in the current year.
@Will Ahrens Thank You Will! Very helpful.
A dishwasher would almost certainly be expensed for both books and tax if you make a de minimis safe harbor election for the tax year in question.
If you do not make a DMSH election and the cost of the property is more than $200 (cost includes sales tax, delivery, installation and testing), it would generally be capitalized and depreciated. However S179 and bonus may be available to accelerate depreciation.