Dear CPA: Furniture for an AirBnB. Can I deduct $$ to furnish?

[Andrew Gingerich]

If I buy furniture and furnishings for an AirBnB before I put the property in service or advertise it on the AirBnB site, can I still deduct the furniture and furnishing in the first year? Or do I have to capitalize this cost/expense? It would seen crazy to capitalize furniture and furnishings especially since the useful life will be way less than 27.5 years. Rather how long will my couch last? My coffee maker? etc.

@Brandon Hall likely has the answer!??! Others?

Appreciate the intel. 

Andrew

[Ashish Acharya]

Originally posted by @Andrew Gingerich:

If I buy furniture and furnishings for an AirBnB before I put the property in service or advertise it on the AirBnB site, can I still deduct the furniture and furnishing in the first year? Or do I have to capitalize this cost/expense? It would seen crazy to capitalize furniture and furnishings especially since the useful life will be way less than 27.5 years. Rather how long will my couch last? My coffee maker? etc.

@Brandon Hall likely has the answer!??! Others?

Appreciate the intel. 

Andrew

Generally, yes you have to capitalize it but you can take 100% bonus depreciation in the same year. 

Preferably, you could also expense it under the safe harbor if expenses are less than 2500. Expenses is better as you don’t have to track basis. 

Also, the recovery life of the assets you are mentioning are not 27.5. It is 5/7 years for depreciation. Doesn’t matter because you will take 100% bonus if you have to capitalize.