Should tanks be capitalized?

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#1
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I have a new S corp client that is involved in the water softening business. They install tanks to hold the brine at their customer's location. The corp retains ownership of the tanks but charges rent to the customers.

Do I have to set-up and identify by location each of these tanks on a depreciation schedule? Or could I elect the de minimis safe harbor election since almost all of them cost less than $2500 each and expense them?

Thank you for your input!
 

#2
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North Carolina
You can expense them under the de minimis safe harbor. I posed a similar situation to a CPE instructor, and was told that situations like this do qualify. Will definitely cut down on a lot of "depreciation schedule" work!
 

#3
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Thank you! It would be much easier to expense them under the election. However, we have a very "ugly" loss and I'm not sure that I want to make it look even worse by doing that.
 

#4
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I like these rules. It gets around the s179 cap which, in NC, is much lower than federal. Mind you, with business personal property taxes in NC, we have to maintain a separate schedule for expensed items anyway.
 

#5
rotsky  
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Generally no, unless used as the first word of a sentence.
 

#6
Noobie  
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Jacksonville, FL
You choose if you want to expense or capitalize. FL tangible property tax makes us keep track of them anyhow.
 


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