Safe Harbor for new rental property

[Eric Peterson]

Hello. My wife and I are buying a rental property and we are a little confused about how we will have to account for some improvements we may want to make. Will we have to depreciate any of these or can they be deducted this year? Can anyone explain what our options are or point us in the right direction of a resource that is current?

If it matters the home price is $299,730 and we both are real estate professionals. 

Here are some of the things we may do. If there is an overall limit we'd have to stay under I can eliminate some of these ideas. 

Replace carpet with tile floor (~$2,600)

Add fencing (~1,000)

Buy refrigerator (~$1,000)

Add ceiling fans (~$500)

Add gutters (~$1,300)

Thank you! 

[Brandon Hall]

@Eric Peterson the De Minimis Safe Harbor allows you to expebse rather than capitalize repairs, maintenance and improvements under $2500 per item on the invoice.

That said, if all items are target one Unit of Property, then you take the aggregte value. An example would be an HVAC replacement - you can't divide the cost of the labor and parts to get each items below $2500. Instead we look at the total cost of the repair for that UOP.