Depreciating furniture and appliances in a rental

By Tom, CPA · Updated October 27, 2026

Part of: Rental Property Taxes

TL;DR: Furniture, appliances and carpet used in a residential rental are 5-year property, not 27.5-year building. In 2026 you can often deduct them immediately through the $2,500 de minimis safe harbor or 100% bonus depreciation (property acquired after Jan. 19, 2025). Built-in components like a furnace or wiring stay with the building unless a study says otherwise.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

There are two kinds of landlords: those who depreciate the dishwasher over 27.5 years, and those who read this article. Your tenant pays the mortgage; the IRS pays for the roof (eventually, over 27.5 years). The fridge, though, it pays for much faster, if you file it in the right bucket.

This guide is for long-term and short-term rental owners who buy furnishings, appliances and other movable stuff and want to know how fast it comes off their taxes, as of Oct 2026.

CPA Warning Label: Five-year treatment is for movable items. Calling the furnace furniture is how a quick deduction becomes an audit adjustment with interest.

5-year vs 27.5-year assets

IRS Publication 946's class-life table puts "appliances, carpets, furniture, etc., used in a residential rental real estate activity" in the 5-year class under MACRS. The building and its structural components (roof, HVAC system, plumbing, wiring, windows, built-in cabinets) are 27.5-year residential rental property, or 39-year nonresidential if the property doesn't meet the dwelling-unit test (common for transient-use STRs).

The test is roughly "would it leave with the tenant in a moving truck without a crowbar?" Movable, stand-alone items are personal property. Things attached as part of the building's operation are structural. A cost segregation study can identify more personal property and land improvements inside a purchase price, but for items you buy separately, the invoice usually tells the story.

Five-year property generally uses the 200% declining balance method with a half-year convention (or mid-quarter if more than 40% of the year's personal property was placed in service in the last quarter). The building uses straight-line, mid-month.

De minimis for furnishings

The de minimis safe harbor under Treas. Reg. 1.263(a)-1(f) lets a taxpayer without an applicable financial statement deduct items costing $2,500 or less per invoice or per item (as substantiated by invoice). You elect it annually by attaching a statement to a timely filed return, including extensions. See the IRS tangible property regulations FAQ and our de minimis safe harbor guide.

• A $1,800 refrigerator: deduct it, no depreciation schedule needed.
• A $4,200 sectional on one invoice: over the limit, so it is depreciated (or bonused).
• Eight $400 dining chairs on one invoice for $3,200: the per-item test works if the invoice lists each item, because each item is $400.

Don't split invoices artificially. The rule looks at the unit of property; a matching sofa set that functions together may be one unit. And if you elect de minimis, you must apply it to all qualifying items that year, so expect your fixed asset list to get shorter and your expense list longer.

Bonus eligibility

Bonus depreciation under section 168(k) applies to MACRS property with a recovery period of 20 years or less, which includes 5-year furnishings and 15-year land improvements. As of Oct 2026, per IRS IR-2026-06 and Notice 2026-11, the One Big Beautiful Bill Act made the 100% rate permanent for qualified property acquired after January 19, 2025. Used property qualifies if you didn't previously use it and didn't buy it from a related party.

So a $6,000 furnishing package for a new STR, purchased in 2026, can usually be deducted in full in the first year through bonus. You can elect out of bonus by class (for example, all 5-year property) if you would rather spread the deduction, say because your rental losses would be suspended anyway or you expect higher income later. The election out is made on the return and is hard to undo.

Section 179 is a separate expensing election, with a 2026 limit of $2,560,000 phasing out above $4,090,000 of purchases (Rev. Proc. 2025-32). But section 179 generally excludes property used predominantly to furnish lodging, so it usually doesn't work for a long-term residential rental. Bonus does. See section 179 for rental property.

A deduction you can't use is just a number. If your rental is passive and you're above the $150,000 MAGI phase-out for the $25,000 allowance, a big bonus deduction creates a suspended loss that waits for passive income or a sale. Still useful; just not this April.

Replacements

Replacing a worn-out appliance is usually a capital expenditure for the new unit, not a repair, because you're replacing a whole unit of property. But for items under $2,500, the de minimis election lets you deduct them anyway. Above that, depreciate or bonus.

When you dispose of the old item, write off its remaining basis. If the old fridge still had $300 of undepreciated basis, that becomes a loss on disposal. That matters most for landlords who never took bonus: years of tiny 5-year deductions stack up, and the junk-hauler visit is a small deduction event.

Repairs to furnishings (reupholstering, fixing a dryer) are generally deductible repairs if they don't better, restore or adapt the item. The repair vs improvement guide walks through the BAR tests, and the routine maintenance safe harbor covers recurring work.

Examples

Illustration 1 (long-term rental, made-up numbers): Frugal Fran buys a duplex in 2026 and spends $3,800 on two refrigerators ($1,900 each, itemized on one invoice) and $5,500 on carpet for both units, installed by one vendor on one invoice.

• Refrigerators: each under $2,500 per item, so deductible under de minimis: $3,800.
• Carpet: $5,500 is over the limit as a unit for the job, so it is 5-year property. With 100% bonus: $5,500 deducted in 2026. Without bonus, first-year 200% DB half-year depreciation would be 20%: $1,100.

Illustration 2 (short-term rental): Lavish Larry furnishes a cabin in April 2026 for $28,000: beds, sofas, a dining table, kitchenware, a hot tub cover, a game table and a ceremonial bear statue. Anything bought separately as personal property is 5-year property; at 100% bonus, roughly $28,000 comes off the first year, assuming the cabin was placed in service in 2026 (it has to be ready and available for rent). If he materially participates and the average stay is 7 days or less, the loss can offset wages. See STR + cost segregation.

Illustration 3 (sale later): Larry sells in 2031. Furnishings that convey with the cabin are part of the sale. Any gain allocated to them up to the $28,000 taken is section 1245 recapture, taxed as ordinary income. Most will have little value, so allocate honestly, and document condition. Details in depreciation recapture.

Short-term rental twists

STRs burn through furnishings faster and often buy more expensive packages up front. Three things change. First, if the building is used on a transient basis, it may be 39-year property, but furnishings stay 5-year. Second, items like linens, towels, dishes and small decor are often consumed within a year and can be deducted as materials and supplies (items costing $200 or less, or with a useful life of 12 months or less, under Reg. 1.162-3). Third, the section 179 transient-lodging exception may apply, though bonus usually makes it unnecessary.

Recordkeeping that makes this easy

Keep each invoice, note the date the item was placed in service (delivered and ready for tenant use), and the property it belongs to. A simple asset list with description, cost, date, method and disposal date beats rebuilding it at sale. Pair this with the rental records guide, because a deduction without a receipt is a story, and the IRS prefers documents to stories.