What is the de minimis safe harbor for tangible property?
Generally, you must capitalize costs to acquire or produce real or tangible personal property used in your trade or business, such as buildings, equipment, or furniture. Capital expenses are considered assets in your business.
However, if you elect to use the de minimis safe harbor for tangible property, you may deduct de minimis amounts paid to acquire or produce certain tangible property if these amounts are deducted by you for financial accounting purposes or in keeping your books and records.
If you have an applicable financial statement, you may use this safe harbor to deduct amounts paid for tangible property up to $5,000 per item or invoice. If you don't have an applicable financial statement, you may use the de minimis safe harbor to deduct amounts paid for tangible property up to $2,500 per item or invoice.
If you choose to make this election, a de minimis safe harbor election statement will be included on your tax return. You only need one statement even if you have multiple businesses, rentals, or farms on your tax return. For more information, see Chapter 8 of IRS Publication 334 .
However, if you elect to use the de minimis safe harbor for tangible property, you may deduct de minimis amounts paid to acquire or produce certain tangible property if these amounts are deducted by you for financial accounting purposes or in keeping your books and records.
If you have an applicable financial statement, you may use this safe harbor to deduct amounts paid for tangible property up to $5,000 per item or invoice. If you don't have an applicable financial statement, you may use the de minimis safe harbor to deduct amounts paid for tangible property up to $2,500 per item or invoice.
If you choose to make this election, a de minimis safe harbor election statement will be included on your tax return. You only need one statement even if you have multiple businesses, rentals, or farms on your tax return. For more information, see Chapter 8 of IRS Publication 334 .
