Miscellaneous business expenses...............
A de minimis safe harbor election
Note: Effective for taxable years beginning on or after January 1, 2016, the Internal Revenue Service in Notice 2015-82 PDF increased the de minimis safe harbor threshold from $500 to $2500 per invoice or item for taxpayers without applicable financial statements. In addition, the IRS will provide audit protection to eligible businesses by not challenging the use of the $2,500 threshold for tax years ending before January 1, 2016 if the taxpayer otherwise satisfies the requirements of Treasury Regulation § 1.263(a)-1(f)(1)(ii).
https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations
Used employer equipment does not constitute used by him. Used by him would be if it were his own personal property from the get go. It was owned (and therefore used) by his employer, which is a different entity. It doesn’t matter that he happened to be the employee that was touching the keyboard.
p.s., if you look closely, you wind up losing your 179 depreciation under AMT anyway in general, so if he’s paying that, not worth it to fill out the form. Use straight line if you going to depreciate, unless it’s a really big ticket item and then check to see how much you’re losing under AMT anyway.
1. I advise you to get a CPA to do business taxes rather that ask the question on FR.
2. In any event, would argue that the previous owner of the equipment was the “user” and it doesn’t matter who operated the equipment. It could have been the current owner/taxpayer, the candlestick maker or a raccoon. Take the Section 179 deduction if otherwise qualified.
Ahhh. An IRS question I like these.
Ask 7 different tax experts and get 9 different answers. Six of which which will be correct.
Call a professional. Don’t get tax advice from total strangers on the internet. And don’t clutter up a political forum with requests for help from total strangers.
Sec 179 the computer and be done with it. Jusr remember if he sells it in the future to recapure some of the deduction.
Sounds like a QBI deduction should be in the works too. If so they can thank President Trump.
Good luck. I managed to navigate my way through the capital gains schedule based on my home sale in my former state of Maryland from last November. Luckily, I ultimately turned out to owe 0 in capital gains, but I was also lucky to get through the documents (written in bureaucratic Sanskrit) so I could properly figure things out.
The tax code is a monstrosity. Hundreds of billions of dollars wasted annually on compliance costs, that could instead have been economically productive labor. Scrap it all.
Just make it up as you go along