We purchased a vacation house in 2022, and started renting it - partly, in order to meet the IRS safe harbor for investment characterization of the replacement property in a 1031 like-kind exchange.
We are eligible to deduct $25,000 of passive real estate losses using the "special allowance for rental real estate activities with active participation" because our MAGI will be $100,000 (or not much more), so I'd like to expense as much stuff as possible on Schedule E.
It looks to me like we can take great advantage of the "de minimis safe harbor" and I want to make sure I understand it correctly. It appears that we can deduct any repairs, improvements, maintenance, etc, as long as their cost is shown on invoices that are $2500 or less. It also appears that if the invoice is itemized, we can expense single items on the invoice if they are less than $2500 (including a pro-rated share of shipping etc).
Do I understand this correctly ? We have only two improvements that cost over $2500, a new metal roof and an off-street parking space. Clearly those are improvements and cannot be expensed, and so must be declared as assets to be depreciated.
However, of the smaller items, some are also clearly improvements ($2000 for a radon mitigation system, and $1000 for a bear-proof trash receptacle, $3000+ for a minisplit heat pump). But since the radon and trash bin cost less than $2500, I can expense them, using de minimis. Even for the heat pump, though the entire DIY installation cost more than $2500, the unit itself is itemized on an invoice for about $2200. So I believe I can also expense this, along with the various installation components shown on that invoice and several others.
Do I have this right ? Can I literally expense everything except the roof and the parking space ?