Announcement

Collapse
No announcement yet.

De minimis expense entry

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    De minimis expense entry

    1. There are multiple business expenses sections such as Materials and Supplies, Repairs, Other Expenses, etc. Which one of those Schedule E tax line numbers should be used for De Minimis asset purchases?

    2. Presuming someone is going to say "Other Expenses" the next question is, does each De Minimis Asset purchase need to be listed as
    . A. a separate line item for each asset (e.g. Other Expenses First Row - Lawn Mower, Other Expenses Second Row - Washing Machine, Other Expenses Third Row - Window Panes, Fourth Row: Garden Hoses, etc)?
    . B. A separate line item for each category of asset (e.g. Other Expenses First Row: De Minimis Tools, Second Row: De Minimis Parts) or
    . C. A single line entry saying De Minimis Asset Purchases?


    I find this in Tangible Property Regulations - Frequently Asked Questions
    Defines Final Property Regulations, who the tangible property regulations apply to and the important aspects of the final regulations. The procedures by which a taxpayer may obtain the automatic consent of the Commissioner of Internal Revenue to change to the methods of accounting.


    When can you deduct the costs of materials and supplies?
    • Application with de minimis safe harbor – If you elect to use the de minimis safe harbor and any materials and supplies also qualify for the safe harbor, you must deduct amounts paid for these materials or supplies under the safe harbor in the taxable year the amounts are paid or incurred. Such amounts are not treated as amounts paid for materials and supplies and may be deducted as business expenses in the taxable year they are paid or incurred.


    Thus it appears that if you elect to use the de minimis safe harbor, they must be entered as a separate line item on Sch. E.
    Should we enter de minimis supplies, and de minimis repairs, and de minimis painting etc or should all de minimis items be lumped together as "other expenses?"

    #2
    I have decided to list mine separately as that's how the tp gave em to me. That way tp can see them on return.

    Comment


      #3
      I don't think it really matters where it goes.


      For your citation on that link, I interpret that statement differently based on the context. The title of the subheading is "When can you deduct the costs of materials and supplies?"

      I read that paragraph as pointing out that using the De Minimis election you deduct the items "when paid or incurred", rather than the rule for non-incidental materials and supplies as being deductible when "first used or consumed".

      Comment


        #4
        Thanks for the responses!

        Comment

        Working...
        X