How do you depreciate appliances and carpet in a rental?
Publication 527 puts appliances, carpets and furniture used in rental property in the 5-year class, not the 27.5 years used for the building. They are normally depreciated with the 200% declining balance method and a half-year convention, which gives 20% in the first year and 32% in the second.
The recovery periods in Publication 527
Table 2-1 of Publication 527 lists the periods for property used in rental activities. Most owners use the general depreciation system (GDS); the alternative system (ADS) applies in specific cases your tax preparer will flag.
| Item | GDS years | ADS years |
|---|---|---|
| Appliances (stoves, refrigerators) | 5 | 9 |
| Carpets | 5 | 9 |
| Furniture used in rental property | 5 | 9 |
| Office furniture and equipment | 7 | 10 |
| Fences, roads, shrubbery | 15 | 20 |
| Building and structural components (furnaces, water pipes, venting) | 27.5 | 30 |
| Additions and improvements | Same as the property improved | Same as the property improved |
The last two rows are the ones owners mix up. A furnace or new plumbing is part of the building and follows the building's 27.5 years. A refrigerator sitting in the kitchen is not. Our post on 27.5-year depreciation covers the building itself.
The method and convention
Publication 527 says to use the 200% declining balance method and a half-year convention for property in the 5- or 7-year class, unless the mid-quarter convention is required. You may elect the 150% declining balance or straight-line method instead. Under the half-year convention, the percentages in Table 2-2a for 5-year property are 20% in year 1 and 32% in year 2, with smaller percentages from the same table in the later years.
Example a made-up 8 unit building puts a new $1,000 refrigerator and $600 stove into service in June. Year 1 depreciation is $200 for the refrigerator ($1,000 x 20%) and $120 for the stove ($600 x 20%). Year 2 is $320 and $192. These are the same figures Publication 527 uses in its own example.
The mid-quarter trap for late-year purchases
If more than 40% of the year's depreciable basis for this kind of property was placed in service in the last three months of the year, the mid-quarter convention applies to all of it. Publication 527's example: a $400 dishwasher in January, $100 of used furniture in September and an $800 refrigerator in October. The total is $1,300, 40% of that is $520, and the October refrigerator alone exceeds $520, so every item uses mid-quarter rates.
Under mid-quarter, the first-year rate for 5-year property placed in service in the fourth quarter is 5%, and for the second quarter 25%. That is why a big October appliance order can shrink the first-year deduction. Planning large replacements earlier in the year, or knowing the rule exists, avoids a surprise.
Example a made-up owner replaces carpet in six units in November for $9,600, and those are the only 5-year purchases of the year. All of it is fourth-quarter property, so year 1 depreciation is $9,600 x 5% = $480 instead of $1,920 under the half-year rate.
Faster options to ask about
- The de minimis safe harbor election can let you expense lower-cost items in the year you buy them instead of depreciating them. See our guide to the de minimis safe harbor.
- Special depreciation allowance: the What's New section of Publication 527 says the 100% special depreciation allowance is restored for qualified property acquired after January 19, 2025, and chapter 2 says some property used in residential rental activities may qualify. Whether yours does is a question for your tax preparer.
- Repairs: fixing an appliance, or patching a section of carpet, is generally a repair rather than a new asset.
What to record for each item
- Date placed in service (installed and available to the tenant), not just the order date.
- Cost including delivery and installation.
- Which property and unit it went into.
- What it replaced, so the old item can be removed from your asset list.
- The invoice, attached to the entry.
A fixed asset list per property with those five fields is enough for your tax preparer to compute depreciation on Form 4562 and to handle disposals when you replace the item again.
How DoorKeeping handles it
In DoorKeeping, each property's LLC has its own ledger, so a new refrigerator for unit 3B is recorded against that building, with the invoice attached, after your one-tap approval. Expense accounts map to Schedule E lines, and depreciation on line 18 comes from your tax preparer's Form 4562. The AI reads and codes the invoice for you. DoorKeeping does not compute tax depreciation or give tax advice.
Sources
- IRS, Publication 527, Residential Rental Property, read Oct 29, 2026
Questions
- Is carpet in a rental 5-year or 27.5-year property?
- Publication 527's Table 2-1 lists carpets as 5-year property under GDS (9 years under ADS). Ask your tax preparer if the flooring is a different material or is part of a larger renovation.
- What is the first-year depreciation rate for a rental appliance?
- Under the half-year convention it is 20% of the cost. If the mid-quarter convention applies and the appliance was placed in service in the fourth quarter, it is 5%.
- Is a new furnace a 5-year appliance?
- No. Publication 527 lists furnaces, water pipes and venting as structural components that follow the building's 27.5-year period.