Can I use a product personally after I used the de minimis safe harbor election to deduct it as a business expense?

by Christopher C. Humes, CPA | Oct 31, 2018

I bought furniture (under $600 in total) to see clients in a rented office. I used the de minimis safe harbor election to deduct it as a business expense. The following year, I stopped renting the office and saw clients at their locations. I then brought home the furniture and used it for personal use. Once one uses the de minimis safe harbor election, does a product need to be used for business until it is totally depreciated?

Since the furniture was not required to be capitalized as a result of the de minimis safe harbor rules, it therefore isn’t treated as a capitalized asset that would be expensed through either normal depreciation or the use of the Section 179 expense provisions. Thus, since it was never a capital asset for tax purposes and was deducted as an ordinary business expense on your tax return when purchased, it isn’t required to be used for business until it would have otherwise been held for the normal seven-year depreciable life for furniture.   

Your question also points out the importance of making and including proper election statements when filing a tax return.

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Answered by: Christopher C. Humes, CPA, is with Baker Tilly Virchow Krause LLP in Wormleysburg, Pa.

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