R2 M1 - Basis & Holding Period of Assets Flashcards
1
Q
What is the De minimis Safe Habor rule?
A
Personal Property item that are expensed under the de minimis safe habor provision. The amount depends on whether the taxpayer has an applicable financial statement (AFS) or audited financial statement.
A taxpayer with an (AFS) can expense up to $5,000 per item.
A taxpayer without an (AFS) can only deduct, up to $2,500 per item.
If the cost of the item is more than the allowable amount, the entire cost of the item must be capitalized.
