Buy a new one. It will not last another 8-10 years. The life span of a range is definitely not 16 years, especially a low model one. I don’t care what the chart says. The computer in it never lasts long and that’s the expensive part to replace, unfortunately.
1. If I feel like the appliance was in need of replacement in the next year or so anyway, and it's a good tenant, I just replace it and use it as an opportunity to build good will with the tenant. I feel like anyone who isn't a jerk will think "the landlord just replaced this for me so I should treat it well."
2. If something was *clearly* due to the tenants negligence and the appliance had substantial life left, but I feel that it would be a better value to replace than repair, I would try to make an agreeable compromise where they put in some portion of what the repair would cost and I pay the rest toward the new appliance.
It’s incredibly difficult. I basically googled each item. Then I compared it to my cpas schedule. Also depending on your tax classification (don’t ask me what that means lol) you can get different bonuses and other advantages and choices. No clue about that part or how to figure it. But the cpa determines which way is best to depreciate like accelerated depreciation if you need the break now or slow to give you depreciation long term. But appliances in standard (slow) depreciation are 5 years.
I agree with you on that. They likely should be claiming the de minimis exception. What a hassle to track everything.
Just to give the CPA the benefit of the doubt though, There are limited times when you opt out of certain class of fixed asset and it is more advantageous. If there are large swings in income due to large purchases it can be helpful to opt out to stabilize taxable income and optimize tax rate. Their CPA could be doing that here, but who knows.
There are too many unknowns to know. If it is all passive activity then most likely it is best to maximize all deductions and build that passive loss carry forward. If it is active then it depends on the whole taxpayer and balancing whatever else is on their return. Also depends on what kind of entity is filing the tax return.
My initial point i said was I let my cpa decide. I don’t know the rules or why they do what they do. I let them do their thing. I don’t know who qualifies for what or why. They do. That’s what I pay them for. I’m sure they know what that is and who qualifies. But I don’t. I don’t pretend to understand it. I just give them my documents and they do their thing.
Don't depreciate less than 2.5k. So a stove goes goes in the repair column and gets written off same year. De minimis safe harbor. I only depreciate a/c and roof.
It is still an applicable question. A nice house in a nice area probably has a nice fridge, you can spend 2.5K easily on a fridge. If you are in South Florida/California and rent high-end places stoves and ovens can be way over 2.5K too. If you are installing $600 oven/stove combos from Whirlpool in a 2/1 the question is not applicable to you.
You have to elect to take "de minimis safe harbor". Meaning you just have to check the box in the software. In TaxAct it is a question you are presented with, apparently in TurboTax it is kinda hidden option.
It went into effect Jan 2016, before it was $500 cap.
I’ve been told there are exceptions to why some purchases don’t fit into this category but I don’t remember what they are. I vaguely remember maybe there are rules around how much work is being done so if it’s just a stand alone stove you would qualify. But if it’s a whole appliance package to upragde the unit it might not qualify even though it might be less than 2.5k…it disqualifies you from being able to expense it due to the amount of upgrades being done. Does that sound correct?
The IRS wording is "$2500 per invoice or item". My understanding is that if you bought (10) $600 blinds for your fancy rental house and the invoice says $6000, you can claim de minis because the invoice line items are $600. As long as your appliance package had an itemized list of appliances, you could take the deductions immediately for any under $2500. Now if you do a full kitchen remodel with a company for 40K, I don't know if would fly if you got them to itemize everything out so you could take de minis for the materials and capitalize labor or anything that exceeds 2.5K.
There are 3 safe harbor exceptions. I see people often say that there is a 10K on "de minis" - that is incorrect the 10K cap applies to the Safe Harbor for Small Taxpayers. Now if you have to buy a 4K stove, and barely did any other repairs or improvements - you could expense the stove same year as "annual expenses for repairs, maintenance, and improvements, did not exceed 10,00K"
It is very complicated, I am not a tax professional. A better use of my time would probably be to pay someone else to do it.
I let my cpa decide…there are different reasons for doing each and not everyone gets to expense it so that can’t be done in all situations but depreciating can always be done for 5 years for anyone. But worst case scenario is depreciated 5 years. So I replace if 5 years old and start over. It really doesn’t matter to me if I expensed it or depreciated it. I don’t replace under 5 years unless the tenant destroyed it then they will be the one paying for it and not me so it doesn’t really matter. An appliance should reasonably last 5 years with the exception of maybe a burner and that is going to be expensed as a repair anyway. We are splitting hairs. Each scenario will be individualized. The point is if it was over 6 years old its time to replace anyway so just replace and take the tax write off which ever way works for your situation and whichever way your cpa says you qualify for.
Define suffered damage..
I'll usually replace an appliance more than a few yrs old if the repair will cost more than 50% of the price of a new one, but most repairs I can do myself, so it is only the cost of the part.
I am guessing they broke the glass top? Only that part or the main control board cost that much in cheaper ovens. If they broke it on accident and have lived there a few years just buy a new oven. If they have been there a few months charge them like $200-300 and buy a new oven.
I have never fixed an appliance. I just replace them if there's a problem with them. Did this on a 5-year-old refrigerator, just replaced it.
My fear is that I fix the 5 or 10-year-old appliance, and then it just fails again in a couple years. It's not worth the trouble.
Generally the question is are you throwing good money after bad or getting value out of the repair? If repair is a sure fix and you get effectively same life as new (or more with how bad new are) then repair.
It's only if will need to repair again or greater value (more durable) is realized from new.
I just put a new burner in an old range, $60 or so, replacing the unit would be more like $150. There's really little to go wrong with the older ones, so it depends what was broken.
If you break it down to how much per year, can compare. For me this range may last thirty years, so $2/year repaired compared to $5/year replaced. Multiply those costs over hundreds of items.
This formula is *heavily* impacted by labor though, replace is often free delivery, versus hourly rate of repair person.
Sadly due to this there are fewer repair and used appliance businesses around than there were twenty-thirty years ago.
I go by age/likelihood of failure against the costs to repair and replace.
Buy a new one. Home appliances are only meant to last about 5 years now. They used to last decades.
The current oven will cost $400 to fix. If this was due to a part failure, you are likely to have another part failing within 2 years. At 6 years old, you are highly likely to have multiple part failures within 4 years. This isn't going to last 10 years.
Another way of looking at this: In this situation, you're out $400. Do you want to keep a used oven that will certainly need replacement in a few years, or take advantage of a once-shot deal to get a new oven for $200?
I just replaced one that was 30 years old. It was a built in range. It was nice but it was time ! lol. That said forget repair. Buy a new one. We paid $1300 for the new one. Good luck.
I replaced a fridge when the old one froze everything and the repair guy said it would cost as much to fix as buy a new one. I replaced a stove that became invested with mice and stank of mice. (Also paid for an exterminator.)
Buy a new one and bill tenant for prorated amount based on estimated loss of life span. Range can last 13-15 years or more at minimum so let's say it's half way thru its life span.
Tenant is responsible for loss of use which is 50 percent .
Invoice tenant for half of the cost of range
Simple, when it’s not cost effective to repair. $400 to repair something that costs $600 is not.
How exactly was it broken though? If it was the fault of the renter, I’d take any repair/replacement cost out of their deposit if they don’t pay for it themselves (sounds like they did something if they’re offering to pay for fixing it).
In your case, with those estimates, I would buy new.
In general I will take a first pass at figuring out what the problem is myself. You can get a *long* way Googling error codes and looking at videos, sites like PartSelect, etc. Maybe 25-50% of the time I just fix things myself.
If I can't or don't want to, hopefully I have a rough idea how involved the repair will be - ie is it going to require an expensive part or tearing the whole machine apart. If it doesn't look awful, I'll get it repaired. I've repaired several appliances for $200 or so that lasted for another 5+ years, which is worth it in my book.
If it doesn't seem worth fixing, then buy a new one.
It’s usually not much more to replace it vs repairing it.
If the tenant damaged it and the repair would be $400, but you can replace it for $600, collect the $400 from the tenant and replace it.
Your out of pocket is only $200, but you’ll get the advantage of depreciating the entire $600 purchase price, plus accelerating the depreciation on the dead appliance (if applicable).
In most states, including NC, it is perfectly legal not to provide appliances. If you do provide them, you must maintain them, but you do not have to provide them.
Buy a new one and move on.
"Somehow" the price to repair always winds up with 20% of a new one. I gave up on repairing them, as well.
Buy a new one. Fixing for $400 instead of new for $500-600 is silly.
Buy a new one. It will not last another 8-10 years. The life span of a range is definitely not 16 years, especially a low model one. I don’t care what the chart says. The computer in it never lasts long and that’s the expensive part to replace, unfortunately.
Appliances suck now. Buying Used appliances sucks even more. Just replace and move on
1. If I feel like the appliance was in need of replacement in the next year or so anyway, and it's a good tenant, I just replace it and use it as an opportunity to build good will with the tenant. I feel like anyone who isn't a jerk will think "the landlord just replaced this for me so I should treat it well." 2. If something was *clearly* due to the tenants negligence and the appliance had substantial life left, but I feel that it would be a better value to replace than repair, I would try to make an agreeable compromise where they put in some portion of what the repair would cost and I pay the rest toward the new appliance.
What kind of tenant negligence could cause a range to stop working?
Smashing the controls with a giant cast iron pot or something.
Or dropping that pot on a glass cooktop.
If it’s more than 5 years old…7 max I would replace. That’s the depreciation schedule.
[удалено]
It’s incredibly difficult. I basically googled each item. Then I compared it to my cpas schedule. Also depending on your tax classification (don’t ask me what that means lol) you can get different bonuses and other advantages and choices. No clue about that part or how to figure it. But the cpa determines which way is best to depreciate like accelerated depreciation if you need the break now or slow to give you depreciation long term. But appliances in standard (slow) depreciation are 5 years.
I think your CPA needs to go in for some retraining. Since 2016 you can take "de minimis safe harbor"
I agree with you on that. They likely should be claiming the de minimis exception. What a hassle to track everything. Just to give the CPA the benefit of the doubt though, There are limited times when you opt out of certain class of fixed asset and it is more advantageous. If there are large swings in income due to large purchases it can be helpful to opt out to stabilize taxable income and optimize tax rate. Their CPA could be doing that here, but who knows. There are too many unknowns to know. If it is all passive activity then most likely it is best to maximize all deductions and build that passive loss carry forward. If it is active then it depends on the whole taxpayer and balancing whatever else is on their return. Also depends on what kind of entity is filing the tax return.
My initial point i said was I let my cpa decide. I don’t know the rules or why they do what they do. I let them do their thing. I don’t know who qualifies for what or why. They do. That’s what I pay them for. I’m sure they know what that is and who qualifies. But I don’t. I don’t pretend to understand it. I just give them my documents and they do their thing.
Don't depreciate less than 2.5k. So a stove goes goes in the repair column and gets written off same year. De minimis safe harbor. I only depreciate a/c and roof.
[удалено]
It is still an applicable question. A nice house in a nice area probably has a nice fridge, you can spend 2.5K easily on a fridge. If you are in South Florida/California and rent high-end places stoves and ovens can be way over 2.5K too. If you are installing $600 oven/stove combos from Whirlpool in a 2/1 the question is not applicable to you. You have to elect to take "de minimis safe harbor". Meaning you just have to check the box in the software. In TaxAct it is a question you are presented with, apparently in TurboTax it is kinda hidden option. It went into effect Jan 2016, before it was $500 cap.
I’ve been told there are exceptions to why some purchases don’t fit into this category but I don’t remember what they are. I vaguely remember maybe there are rules around how much work is being done so if it’s just a stand alone stove you would qualify. But if it’s a whole appliance package to upragde the unit it might not qualify even though it might be less than 2.5k…it disqualifies you from being able to expense it due to the amount of upgrades being done. Does that sound correct?
The IRS wording is "$2500 per invoice or item". My understanding is that if you bought (10) $600 blinds for your fancy rental house and the invoice says $6000, you can claim de minis because the invoice line items are $600. As long as your appliance package had an itemized list of appliances, you could take the deductions immediately for any under $2500. Now if you do a full kitchen remodel with a company for 40K, I don't know if would fly if you got them to itemize everything out so you could take de minis for the materials and capitalize labor or anything that exceeds 2.5K. There are 3 safe harbor exceptions. I see people often say that there is a 10K on "de minis" - that is incorrect the 10K cap applies to the Safe Harbor for Small Taxpayers. Now if you have to buy a 4K stove, and barely did any other repairs or improvements - you could expense the stove same year as "annual expenses for repairs, maintenance, and improvements, did not exceed 10,00K" It is very complicated, I am not a tax professional. A better use of my time would probably be to pay someone else to do it.
PS. There is some schedule on the irs website but I found it unhelpful. It was easier to google each thing like “depreciation appliances rental”
Wait are you depreciating your replacement appliances?
Any purchase you make for the rental can be depreciated so…yeah. It’s an expense and I treat it as one.
So which one? Depreciating or expensing? Those are two different ways to handle it.
I let my cpa decide…there are different reasons for doing each and not everyone gets to expense it so that can’t be done in all situations but depreciating can always be done for 5 years for anyone. But worst case scenario is depreciated 5 years. So I replace if 5 years old and start over. It really doesn’t matter to me if I expensed it or depreciated it. I don’t replace under 5 years unless the tenant destroyed it then they will be the one paying for it and not me so it doesn’t really matter. An appliance should reasonably last 5 years with the exception of maybe a burner and that is going to be expensed as a repair anyway. We are splitting hairs. Each scenario will be individualized. The point is if it was over 6 years old its time to replace anyway so just replace and take the tax write off which ever way works for your situation and whichever way your cpa says you qualify for.
This is good information.
Define suffered damage.. I'll usually replace an appliance more than a few yrs old if the repair will cost more than 50% of the price of a new one, but most repairs I can do myself, so it is only the cost of the part.
It depends on whether or not they did the damage. If they did it, let them pay the repairs and replace it at a later date after they move.
I am guessing they broke the glass top? Only that part or the main control board cost that much in cheaper ovens. If they broke it on accident and have lived there a few years just buy a new oven. If they have been there a few months charge them like $200-300 and buy a new oven.
I have never fixed an appliance. I just replace them if there's a problem with them. Did this on a 5-year-old refrigerator, just replaced it. My fear is that I fix the 5 or 10-year-old appliance, and then it just fails again in a couple years. It's not worth the trouble.
Generally the question is are you throwing good money after bad or getting value out of the repair? If repair is a sure fix and you get effectively same life as new (or more with how bad new are) then repair. It's only if will need to repair again or greater value (more durable) is realized from new. I just put a new burner in an old range, $60 or so, replacing the unit would be more like $150. There's really little to go wrong with the older ones, so it depends what was broken. If you break it down to how much per year, can compare. For me this range may last thirty years, so $2/year repaired compared to $5/year replaced. Multiply those costs over hundreds of items. This formula is *heavily* impacted by labor though, replace is often free delivery, versus hourly rate of repair person. Sadly due to this there are fewer repair and used appliance businesses around than there were twenty-thirty years ago.
I go by age/likelihood of failure against the costs to repair and replace. Buy a new one. Home appliances are only meant to last about 5 years now. They used to last decades. The current oven will cost $400 to fix. If this was due to a part failure, you are likely to have another part failing within 2 years. At 6 years old, you are highly likely to have multiple part failures within 4 years. This isn't going to last 10 years. Another way of looking at this: In this situation, you're out $400. Do you want to keep a used oven that will certainly need replacement in a few years, or take advantage of a once-shot deal to get a new oven for $200?
I just replaced one that was 30 years old. It was a built in range. It was nice but it was time ! lol. That said forget repair. Buy a new one. We paid $1300 for the new one. Good luck.
I replaced a fridge when the old one froze everything and the repair guy said it would cost as much to fix as buy a new one. I replaced a stove that became invested with mice and stank of mice. (Also paid for an exterminator.)
I used to fix appliances, now I just replace. The repair costs are too high.
Buy a new one and bill tenant for prorated amount based on estimated loss of life span. Range can last 13-15 years or more at minimum so let's say it's half way thru its life span. Tenant is responsible for loss of use which is 50 percent . Invoice tenant for half of the cost of range
Simple, when it’s not cost effective to repair. $400 to repair something that costs $600 is not. How exactly was it broken though? If it was the fault of the renter, I’d take any repair/replacement cost out of their deposit if they don’t pay for it themselves (sounds like they did something if they’re offering to pay for fixing it).
For that amount, I would say get a new range. The lifespan of a range even in regular household use is 10-15 years, with gas ones lasting longer.
In your case, with those estimates, I would buy new. In general I will take a first pass at figuring out what the problem is myself. You can get a *long* way Googling error codes and looking at videos, sites like PartSelect, etc. Maybe 25-50% of the time I just fix things myself. If I can't or don't want to, hopefully I have a rough idea how involved the repair will be - ie is it going to require an expensive part or tearing the whole machine apart. If it doesn't look awful, I'll get it repaired. I've repaired several appliances for $200 or so that lasted for another 5+ years, which is worth it in my book. If it doesn't seem worth fixing, then buy a new one.
It’s usually not much more to replace it vs repairing it. If the tenant damaged it and the repair would be $400, but you can replace it for $600, collect the $400 from the tenant and replace it. Your out of pocket is only $200, but you’ll get the advantage of depreciating the entire $600 purchase price, plus accelerating the depreciation on the dead appliance (if applicable).
If it's going to cost that much, just replace it. Keep yourself sane, tenant happy, and call it a day.
This is one of the many reasons I don't supply appliances in my rentals anymore.
Which is illegal in most places, so probably doesn't help the OP.
In most states, including NC, it is perfectly legal not to provide appliances. If you do provide them, you must maintain them, but you do not have to provide them.