A safe harbor election for tangible property involves a taxpayer's option to elect to expense certain items rather than capitalize them. This allows the taxpayer to deduct in the current tax year the entire amount of the expenditure rather than depreciate the item over some period of time. These expenditures then are subject to a monetary limitation in an amount which is referred to as the de minimis safe harbor election. Under this election, you must treat all the expenditures that meet the criteria for the election in the same manner in any year that the taxpayer makes the election.
In order to claim this election, the preparer must attach a statement titled "Section 1.263(a)-1(f) de minimis safe harbor election" to the tax return for each taxable year. This statement should include the the taxpayer's name, address, and SSN, as well as a statement that they are making the de minimis safe harbor election for the applicable tax year.
To generate the safe harbor election in TaxSlayer ProWeb, from the Federal Section select:
- Miscellaneous Forms
- Explanations
- Elections Explanations - In the dropdown menu select De minimis safe harbor election.
- Generate the De minimis safe harbor election? - Select Yes. The statement will generate in its own window where you can edit it if desired.
When you print the return, the election will be included on its own page headed "Election Explanations".
Note: This is a guide on making the de minimis safe harbor election for tangible property in TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information:
IRS: Tangible Property Regulations - Frequently Asked Questions