Furniture Purchase for STR

[Steven Correale]

We have the option to purchase furniture on a property that will be used as a short term rental. Should we purchase the furniture on the side, or have it built into the offer as no added value. Example: purchase price $750k + $25k for furniture or $775k fully furnished.

My question is based around what would be better from a tax deduction standpoint. Can deduct all of the furniture with bonus depreciation in either option?

Steve

[Karl McGarvey]

If you are funding the deal through a loan, the lender will not lend on the furnishings so you are going to pay for them out of pocket regardless. If you purchase the furniture under the real estate contract you at least have a contract showing exactly which pieces you are getting and what you are purchasing for them (but in this case I would also lower my offer to reflect this, personally).