We bought a vacation house, in the USA, in 2022, and are renting it some. I'm trying to figure out what expenses (including repairs, improvements, and maintenance) can be "expensed" (that is, deducted against rental income) and which must be depreciated (over 27.5 years), on my federal income tax return.
It looks to be like the "de minimis safe harbor" election allows me to expense any of these costs, as long as they each are less than $2500, or are an item on an itemized invoice costing less than $2500 (even if the invoice total exceeds $2500).
So a $2000 outlay for a radon mitigation system, as well as a $1000 outlay for a bear-proof trash receptacle, even though both are clearly improvements with life-spans in excess of one year, can be expensed using de minimis.
Similarly, a DIY install of a ductless minisplit heat pump can be expensed, even though the total cost of materials exceeded $2500, because the minisplit itself is billed at $2200 on an invoice. So it, and the $500 or so of installation components (shown on the minisplit invoice and several others) can all be expensed.
Only a roof replacement (upgrading shingles to metal) at $6000, and an off-road parking space, at $3000, must be depreciated.
Do I have this right ?
