The short answer
The de minimis safe harbor lets you deduct low-cost items and improvements instead of depreciating them, up to $2,500 per invoice or item for most landlords. You elect it each year with a statement on your return. Two other safe harbors cover routine maintenance and small buildings.
On this page
What the safe harbors do
The tangible property rules generally require you to capitalize the cost of acquiring property and of improvements, then recover it through depreciation. Three safe harbors let you deduct certain costs in the year you pay them instead:
- The de minimis safe harbor, for lower-cost items.
- The routine maintenance safe harbor, for recurring upkeep.
- The safe harbor for small taxpayers, for small buildings with modest yearly spending.
De minimis limits
Under the IRS tangible property guidance, the limit is $2,500 per invoice or item, as substantiated by invoice, if you do not have an applicable financial statement. The limit is $5,000 if you do. An applicable financial statement includes statements filed with the SEC and certain certified audited statements, so most individual landlords use the $2,500 limit.
- It covers qualifying acquisitions and improvements, not just supplies.
- It does not cover amounts paid for land or inventory.
- If you elect it, you must apply it to all expenses that meet its criteria that year.
- Items you deduct under it are treated as de minimis costs, not as materials and supplies.
How to elect it
Attach a statement titled "Section 1.263(a)-1(f) de minimis safe harbor election" to your timely filed original return, including extensions, for the year you paid the amounts. The election is annual, and it is not a change in accounting method, so you do not file Form 3115.
Without an applicable financial statement, you also need an accounting procedure in place at the start of the year to expense amounts at or below the limit. It does not have to be written, but writing it down makes it easy to show. Publication 527 says to report de minimis amounts on Schedule E, line 19.
A quick example
A landlord who elects the safe harbor buys a $1,100 refrigerator for one unit and a $700 dishwasher for another, each on its own invoice. Both are under $2,500, so both can be deducted that year instead of being depreciated as 5-year property.
Without the election, both appliances would be capitalized and depreciated as 5-year property, giving a smaller deduction each year for several years. With it, the landlord deducts $1,800 in the year paid and keeps two fewer assets on the depreciation schedule.
A $9,000 roof job on a single invoice is over the limit. It falls back to the ordinary repair and improvement rules and the other safe harbors.
Routine maintenance safe harbor
This safe harbor covers recurring activities you expect to perform as a result of using the property, to keep it in ordinarily efficient operating condition. For a building structure or building system, you must reasonably expect to perform the work more than once during the 10 years beginning when it was placed in service. For other property, the test is more than once during its class life.
It does not apply to betterments. It can apply to certain restorations that would otherwise be improvements, such as replacing a major component, when the work is truly recurring.
Safe harbor for small taxpayers
You may elect this safe harbor for a building if all of these are true:
- Your average annual gross receipts are $10 million or less.
- You own or lease building property with an unadjusted basis of $1 million or less.
- The total you paid during the year for repairs, maintenance, improvements and similar work on that building does not exceed the lesser of 2% of its unadjusted basis or $10,000.
For a building with a $300,000 unadjusted basis, 2% is $6,000, so the year's total must stay at or under $6,000. You make this election annually by attaching a statement to that year's return. It is not a change in accounting method.
Materials and supplies
Separate from the safe harbors, the rules treat some items as materials and supplies: tangible property costing $200 or less, or with an economic useful life of 12 months or less. Light bulbs, filters and small parts often fall here. The IRS says you can deduct the cost of certain materials, supplies, repairs and maintenance that keep a rental in good operating condition.
Your policy and records
- Write down your expensing policy before January 1 each year.
- Keep every invoice, since the limit is measured per invoice or item.
- Keep a copy of each election statement with the return it was attached to.
- Track each building's unadjusted basis and yearly repair total for the small taxpayer test.
This guide is general information, not tax advice. Confirm how these rules apply to your situation with a tax professional.
How Rentari helps
Rentari's accounting imports bank feeds and books each expense into your chart of accounts, and split transactions separate costs on one bill. Items you capitalize go to fixed assets with depreciation entries. Rentari keeps the record; your preparer attaches the elections.
Sources and further reading
Common questions
Is the $2,500 de minimis limit per property or per year?
Neither. It applies per invoice or per item, as substantiated by the invoice. Most individual landlords use the $2,500 limit; it is $5,000 only with an applicable financial statement.
Do I have to elect the de minimis safe harbor every year?
Yes. It is an annual election made by attaching a statement to your timely filed original return, including extensions.
Can I use the de minimis safe harbor for a new roof?
Only if the amount per invoice or item is within the limit. Larger roof work is judged under the improvement rules and the other safe harbors.
Does the de minimis safe harbor cover land?
No. The election does not include amounts paid for land or inventory.
Archive years group longstanding rental topics. This Rentari guide was published on 2026-11-14.
The Rentari team writes and updates this guide. Examples illustrate decisions and do not describe customer results. This is general education. Confirm the rules and treatment for your property with a qualified local professional. Found an error or an unclear step? Send a correction with a link to this page and the wording you’d change.
