Tax Credit Refrigerators
September 23rd, 2010
Question: Can I depreciate a refridgerator I bought for my rental unit even though I didn’t finish paying it off?
I bought a refrigerator in May 2007 and have 12 months to pay it off on my Sears credit card. I’ve paid for about half of it. Even though I still have a balance, can I depreciate it in my 2007 taxes or should I be expensed because I’m paying for it on my credit card (no interest financing for 12 months)? Does it have to be fully paid off this year before I can depreciate it in 2007?
Answer: YES – you can depreciate the refrigerator in the year it was purchased regardless of your method of payment.
BUT – you should do some research and find a chattel appraiser. They can go through your entire rental property and legitimately find tons of ways to increase your depreciation for this year.
Basically they break down your asset to find the shortest life (translation – largest depreciate allowed) by ‘piece.’
I won’t try to explain it here – but search the internet for a chattel appraiser near you. They will charge you around $350 but should save you a ton on this year’s taxes.
Good luck
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