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Had to replace ac unit/heat pump this past Spring. How do I list this in minute menu? I know there were some changes in depreciation rules, does this apply?
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AC Unit
If the cost was less than $2500 you can deduct the time-space % in one year. If more, see my article:http://tomcopelandblog.com/major-cha...efit-providers -
It was $3000. So even though technically it was a "repair" since the other was fried, I have to considerate it an "improvement" and depreciate??
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repair vs improvement
Since your replaced it rather than repair it, consider it an improvement. However, if you are eligible for the Safe Harbor Rule for Small Taxpayers you can deduct it in one year. See my article: http://tomcopelandblog.com/when-can-...ed-in-one-year
If you don't meet the test for this rule you can still use the 50% bonus depreciation rule and deduct half the depreciation in the first year and depreciate the other half over 39 years.Comment
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I'm confused. The cost of the new unit was $3100, minute menu lists my deduction as $1074 which is my T/S, is that correct? I didn't list a depreciation method.
Then add the total of my other home repairs and maintenance at what my T/S amount gives me(as everything is shared), if that total is within the threshold to qualify for safe harbor than I can use that rule?Comment
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$2,500 rule
The $2,500 rule applies to items costing $2,500 or less, before applying your time-space %. So, you must add $3,100 to your other home repairs and improvements to see if you qualify for the Safe Harbor rule. If you don't qualify you can still use the 50% bonus depreciation rule.Comment
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