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
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. 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
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?"
Comment