Depreciating Furniture and Appliances in a Furnished Rental

TL;DR: Furniture, appliances, and other personal property in a furnished rental depreciate over 5 years using MACRS, not the 27.5-year schedule that applies to the building. You can often expense items under $2,500 immediately with the de minimis safe harbor, or use Section 179 (up to $1,220,000 in 2024) or bonus depreciation (60% in 2024) to write off larger purchases faster.

_Last reviewed: August 2026 · 7 min read_

You bought a sofa, a fridge, and a dining set for your furnished rental, and now your CPA is asking how you want to depreciate them. Most owners default to lumping everything into the building's depreciation and losing years of deductions they didn't have to give up.

Okoniq Property Hub keeps a running log of every furniture and appliance purchase, its cost, and its in-service date, so you're not digging through old receipts when tax season hits.

What actually counts as depreciable personal property in a furnished rental?

Personal property is anything not permanently attached to the structure: sofas, beds, dressers, refrigerators, washers, dryers, microwaves, window air conditioners, area rugs, and lamps all qualify. Built-in appliances that are wired or plumbed into the structure, like a dishwasher or a range hood, sometimes get treated as part of the building depending on how they're installed, so this is a line worth confirming with your accountant.

The distinction matters because the IRS treats the building itself, under IRS Publication 527, as residential rental real estate depreciated over 27.5 years using the straight-line method. Furniture and freestanding appliances fall under a different class entirely, and mixing the two categories together on your return means you're stretching a 5-year deduction into a 27.5-year one for no reason. If your ice maker finally quits and you're deciding whether to repair or replace it, knowing why your ice maker stopped working can help you decide if a $150 fix beats a $900 replacement that resets your depreciation clock.

How long does it take to depreciate furniture and appliances?

Furniture and appliances depreciate over 5 years under MACRS (Modified Accelerated Cost Recovery System), using either the 200% declining balance method or straight-line, your choice. A $2,000 washer and dryer set, for example, generates roughly $400 a year in straight-line deductions, or a front-loaded amount in year one and two if you use the declining balance method instead.

Carpeting and certain flooring can also qualify for the 5-year schedule if it's not glued down or permanently affixed, while wall-to-wall carpet that's adhered to the subfloor sometimes gets bundled with the building. Appliances that break down early, before you've fully depreciated them, still leave you with a remaining basis you can write off in the year you dispose of the item. That's one more reason to document appliance age and condition; if your oven's igniter or heating element goes out, run through common oven problems you can fix without a technician before assuming it's a full replacement and a new depreciation schedule.

Should you use Section 179, bonus depreciation, or straight MACRS?

For most furnished rental purchases, the de minimis safe harbor, Section 179, and bonus depreciation all beat spreading deductions over 5 years, but they apply differently. The de minimis safe harbor lets you expense any single item costing $2,500 or less in the year you buy it, no depreciation schedule needed at all. That covers most lamps, small appliances, and mid-range furniture pieces outright.

For bigger-ticket items like a full furniture package or a matching set of major appliances, Section 179 lets you deduct up to $1,220,000 in qualifying property placed in service in 2024, though this election has restrictions tied to your rental activity being treated as a trade or business rather than passive investment. Bonus depreciation is simpler for most landlords: it lets you deduct 60% of an asset's cost immediately in 2024, down from 100% in 2022 as the phase-out schedule continues through 2026.

| Method | Limit (2024) | Best for | |---|---|---| | De minimis safe harbor | $2,500 per item | Small furniture, lamps, small appliances | | Bonus depreciation | 60% immediate deduction | Larger appliance and furniture purchases | | Section 179 | Up to $1,220,000 | Owners with active trade-or-business status |

How do you track furniture and appliance depreciation so you don't lose the deduction?

You need the purchase date, cost, and in-service date for every item, kept separately from your building's depreciation schedule. Losing this paperwork is the most common reason landlords either under-claim depreciation or get flagged during an audit for inconsistent basis calculations.

Keep receipts, credit card statements, and photos of the item in place, especially for anything claimed under the de minimis safe harbor, since the IRS wants proof the item was actually put into service that tax year. If an appliance dies early and you're weighing repair against replacement, this record also tells you the remaining basis you can write off. A dishwasher that's underperforming isn't always a depreciation event either; check common dishwasher loading mistakes before writing off a machine that just needs better use, and watch which appliances quietly run up your electric bill so an inefficient unit doesn't get replaced years before its depreciation schedule would suggest.

What happens to depreciation when you sell or replace an item?

When you dispose of a fully or partially depreciated item, you either recognize a gain or loss based on what's left of its basis. If you sell the sofa for $50 after fully depreciating it, that $50 is taxable income. If you replace a washer with three years of remaining basis left, you can deduct that remaining amount in the year you dispose of it, separate from whatever you spend on the replacement.

This is where most owners leave money on the table: they replace a broken appliance, throw out the old one, and never claim the leftover depreciation because their records don't separate individual items from the general "furniture and fixtures" bucket on their return.

FAQ

Can I depreciate furniture I already owned before renting the unit?

Yes, but the basis is the item's fair market value on the date you converted it to rental use, not what you originally paid for it. A five-year-old sofa worth $1,200 today gets depreciated from that $1,200 figure, not its original purchase price.

Do I have to depreciate items under $2,500, or can I just expense them?

You can expense them immediately under the de minimis safe harbor election, which applies per invoice or per item on the invoice. This avoids years of tracking a $200 lamp on a depreciation schedule for no real benefit.

What's the difference between 5-year and 27.5-year property in a furnished rental?

The building, including permanent fixtures like a built-in HVAC system or the roof, depreciates over 27.5 years. Freestanding furniture and appliances depreciate over 5 years, which means you recover your cost more than five times faster on those items.

Does bonus depreciation phase out completely?

Yes, it's scheduled to drop to 40% in 2025, 20% in 2026, and 0% in 2027 under current law, unless Congress extends it. Purchases made in earlier years lock in the higher percentage that applied when the item was placed in service.

Do I need a cost segregation study for a single furnished rental unit?

Usually not. Cost segregation studies make financial sense for larger multi-unit properties or higher-value furnished rentals where the upfront study cost is offset by the accelerated deductions; for a single furnished unit, tracking items individually with the de minimis, Section 179, and bonus depreciation rules is typically enough.

This is educational information, not tax advice. Talk to a CPA about how depreciation elections apply to your specific rental activity and filing status.