New Category for capital expenses under the $2.5K deductible limit

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As I understand it, the IRS allows you to deduct any capital expenses under $2,500 under the de minimis safe harbor election (reference Three Safe Harbors all Landlords and Real Estate Investors Should Know About). However I’m not quite sure how to categorize these expenses within Stessa.

Ideally, stessa would have some sort of category called “Capital Expense within deduction limitation” that would expense the transaction as opposed to capitalizing it for depreciation.

For example, I bought a couch that is $2,000. The only way I can make it show up as an expense is to categorize it as something other than “capital expense”. There are no categories that really fit so i’m forced to put it under a repairs & maintenance or some similar type of expense category. That’s where a “capital expense within deduction limitation” category would come in nicely.

Has anyone found a better way to do this? Would anyone else find this new category useful?

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Actually, I would suggest keeping the existing capital expense categories but with a drop down that asks for accounting treatment (capitalize/expense). Capitalize would be the default category, but it would automatically switch to expense for transactions $2.5k and under.

Can anyone share how they get around this in the meantime?

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I would also definitely find this new category useful. I’ve been putting them under “repairs and maintenance” but know they’re not categorized correctly.

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This would be a HUGE help! I have no preference how it’s done, but please find a way to track a typical capital expense (furniture, appliance, etc.) and yet log it as a standard expense (vs an asset, which would be typical for a capital expenditure).

Taking advantage of the De minimis safe harbor election is tricky when my Schedule E form shows a big chunk of capital expenses. I wind up plugging them in as generic “Repairs and Maintenance”, as well.

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I think this would be very helpful. I seriously struggled with this a few months ago as we renovated a duplex and turned it from LTR to STR and had many expenses I wasn’t exactly sure how to properly categorize.

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Yes - I would also find this extremely helpful. I’m also putting them under “Repairs and Maintenance” and keeping a separate document tracking these in case of an audit. Has anyone found a better solution yet?

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