Deduction for Tools

[Brandon Heimsoth]

I started my first rehab last year and now I'm trying to understand the taxes part of things.  I ended up buying a lot of tools during the rehab.  I assume that falls under the "Supplies" line under schedule E but the tools really apply to my whole business (with multiple properties).  Does it matter which property I assign it to?  Does it end up getting added to the basis for the property and depreciated over 27.5 years?  Or, is there a way to depreciate it all in one year?  Thanks in advance.

[Michael Plaks]

@Brandon Heimsoth

Here is the correct procedure. Create a Google Sheet table listing every tool vertically in the first column. In the second column, list the cost of the item. From third column all the way to 367th column document how many minutes per day you used each tool for property #1. The next 365 columns for property #2. And so on.

Once the table is completed, you're going to calculate a weighted ratio of use per property per tool, using the following formula: ...

OK, I'm done. :)

Switching to a serious mode, without splitting hairs, you allocate the cost of the tools evenly between your Sch E properties, using either the Supplies line or Other expenses.