Purchased Washer/Dryer for Building - Can I claim this Deduction?

Question

Hello, I purchased a washer/dryer and coinbox for my 3-unit property back in October. I was wondering if this is eligible as a business expense - or another type of qualifying deduction - so that I could finish up my income taxes. If so, how would I file this expense? Under repairs, supplies, utilities or other?

Thanks in advance.

Ashish Acharya · Answer

Yes you can.

Depending on the amount you can deduct as expenses or take bonus/179 expenses deduction. Taking bonus or sec 179 depreciation vs. expensing would increase your UBIA for section 199A deductions, if you were subject to limitation.

Talk to your tax advisor.

Michael Metzger · Answer

@LaCroix Rockwell It really depends on your situation and what would be best for your personal finances. I would first ask your accountant what will benefit you most. However, you could add this to your repairs and maintenance. You might also be able to depreciate the appliances over a period over 5 years- best if you are expecting income to rise over coming years. Or with the Secure Act, you can now do 100% bonus depreciation and take the entire depreciation deduction this year- best if you have unusually high income for 2020.

Hope this helps!

Ned Carey · Answer

@LaCroix Rockwell it probably does not qualify as an expense, technically it is a “Capital improvement”

In other words you depreciate it over a number of years instead of taking the entire expense in one year. However there are exceptions like the 179 deduction or something like that.

I suggest an accountant because he or she may save you some money. However if you want to do it yourself the IRS has some excellent booklets on various tax issues for business

LaCroix Rockwell · Answer

Thank you all for the responses. My finances were simple enough that I always filed my taxes myself but the first year I acquired the property, I paid for a professional, learned how she filed - use of Schedule E form, how to enter depreciation deduction, other expense deductions - and have been doing filing taxes myself for the past few years. I don't have a tax accountant.

Since the advice I'm seeking depends on one's financial situation I would say that 2020 we took a bit of a hit so it sounds like it wouldn't make much sense to take the 100% depreciation deduction on the appliances this year correct? The washer and dryer was haggled down to $1188.01 for brand new models and the coinboxes were $560 for a total of $1748.01. Could I deduct as expenses or deduct as appliance depreciation over 5 years? If the latter, do you know the name of the form?

Much appreciated!

Purchased Washer/Dryer for Building - Can I claim this Deduction?

Purchased Washer/Dryer for Building - Can I claim this Deduction?

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