Best way to purchase furnishings for vacation rental

[Chad Price]

Any suggestions on which method is a better way to furnish a rental property?  I am debating whether to use a dedicated business account that is funded to ensure proper tax records vs using a personal credit card so I can accumulate points.  If I maintain proper records I can't see why the personal credit card is a bad option.

Any opinions?

[Collin H.]

Quote from @Chad Price:

Any suggestions on which method is a better way to furnish a rental property?  I am debating whether to use a dedicated business account that is funded to ensure proper tax records vs using a personal credit card so I can accumulate points.  If I maintain proper records I can't see why the personal credit card is a bad option.

Any opinions?

 Use your personal card and reimburse yourself. Just keep the receipts.

[Ken Boone]

It only matters if you are operating as an LLC or not. If you are not an LLC then it doesn't matter. If you are an LLC, then if you use your personal credit card, you would then have to pay yourself from the LLC for what was purchased on the credit card, and you personally would need to provide your LLC with a receipt. So the funds need to come out of the LLC one way or another.

Not a tax advisor by any means.

[John Underwood]

personal would be fine, but I would get a business credit card. I use a capital one spark card that pays 2% back on everything.

[Ian Tyndall]

Quote from @Ken Boone:

It only matters if you are operating as an LLC or not. If you are not an LLC then it doesn't matter. If you are an LLC, then if you use your personal credit card, you would then have to pay yourself from the LLC for what was purchased on the credit card, and you personally would need to provide your LLC with a receipt. So the funds need to come out of the LLC one way or another.

Not a tax advisor by any means.

 Not a tax advisor, but another method is to classify your personal purchases as capital contributions to the business. A contract or receipt is suggested to show the transfer of property. 

[Joe Whitley]

Just keep a record of your purchases including intended use. Either method should work.

[Bruce Woodruff]

You don't have to use an exclusively business account, but you are running a business, right? And I just always feel like you should open a separate account with a business name, and get a business credit card, and a business line of credit. That's the way that it should be done. But you can run it all personal as long as you keep track of paying yourself back for any business expenses that you personally pay. I think that's a big PITA.

[Collin H.]

Quote from @Ian Tyndall:

Quote from @Ken Boone:

It only matters if you are operating as an LLC or not. If you are not an LLC then it doesn't matter. If you are an LLC, then if you use your personal credit card, you would then have to pay yourself from the LLC for what was purchased on the credit card, and you personally would need to provide your LLC with a receipt. So the funds need to come out of the LLC one way or another.

Not a tax advisor by any means.

 Not a tax advisor, but another method is to classify your personal purchases as capital contributions to the business. A contract or receipt is suggested to show the transfer of property. 

The problem with capital contributions is that the deduction must be amortized, with varying schedules depending on the classification of the items purchased. It gets complicated really fast.

Better to simply reimburse yourself for a business expense and take an immediate deduction.

[Ian Tyndall]

Quote from @Collin H.:

Quote from @Ian Tyndall:

Quote from @Ken Boone:

It only matters if you are operating as an LLC or not. If you are not an LLC then it doesn't matter. If you are an LLC, then if you use your personal credit card, you would then have to pay yourself from the LLC for what was purchased on the credit card, and you personally would need to provide your LLC with a receipt. So the funds need to come out of the LLC one way or another.

Not a tax advisor by any means.

 Not a tax advisor, but another method is to classify your personal purchases as capital contributions to the business. A contract or receipt is suggested to show the transfer of property. 

The problem with capital contributions is that the deduction must be amortized, with varying schedules depending on the classification of the items purchased. It gets complicated really fast.

Better to simply reimburse yourself for a business expense and take an immediate deduction.

 Good point. Anything with a useful life over 1 year gets tricky

[Sarah Kensinger]

I would also highly recommend getting a business credit card to purchase furnishings and later supplies for the property. You may even be able to get one at 0% interest for 12 months!

[Jackson Harris]

There's tons of apps out there that can help you with business expenses. Obviously only useful if you're 1099 or have an LLC etc.

Personally I put it all on my credit card that gives me the most cashback or points and the reimburse yourself.

[Andrew Steffens]

I think either is viable but check with your CPA.  You can get a business credit card easily and get points and track business expenses easier that way.  If not you can use personal card, and keep receipts for reimbursement.

[KiKi Wood]

We have had clients use their credit cards to get points. If you have an Amazon credit card, you can purchase furnishings on Amazon and get 5% back. We personally do this for the properties we manage!