schedule E rental property expenses

Here are my questions:
1.
If I buy faucet, toilet parts from home depot
Should I enter as repair or supplies ?

2.
If I buy mop, glass cleaner, windex from home depot
Should I enter as cleaning/maintainance or supplies ?

3.
I advertise, make management decision.
Am I qualified as active participation therefore meet the exception for passive activity loss rules ?
Do I qualify for $25,000 loss ?(assume my MAGI below $100,000)

4.
If I buy refrigerator $1,000 with 5 year class life.
After deduct $200 for first year, it is out of function on 2nd year.
Then I was forced to buy another new refrigerator for $1,200.
At same time, I retire 1st refrigerator from service.
Can I deduct remaining $800 from 1st refrigerator in one year ?
If yes , where can I enter $800 in schedule E ?

guava said:

Here are my questions:
1.
If I buy faucet, toilet parts from home depot
Should I enter as repair or supplies ?

2.
If I buy mop, glass cleaner, windex from home depot
Should I enter as cleaning/maintainance or supplies ?

3.
I advertise, make management decision.
Am I qualified as active participation therefore meet the exception for passive activity loss rules ?
Do I qualify for $25,000 loss ?(assume my MAGI below $100,000)

4.
If I buy refrigerator $1,000 with 5 year class life.
After deduct $200 for first year, it is out of function on 2nd year.
Then I was forced to buy another new refrigerator for $1,200.
At same time, I retire 1st refrigerator from service.
Can I deduct remaining $800 from 1st refrigerator in one year ?
If yes , where can I enter $800 in schedule E ?

Click to expand...

*Putting on my CPA hat*

DISCLAIMER:  I am not responsible for the decisions that you make based upon my input and the tax treatment that you select depends upon your specific circumstances.  That being said...

1. Smaller items such as faucets and toilet parts probably fall into the repairs/supply category and should be expensed.  There is a gray line between what should be capitalized (and depreciated over several years) and what should be expensed (your judgment call on that).

2.  I would expense those items as cleaning/maintenance.

3.  There's another gray area on what makes you an "active" participant which always you to take an active real estate tax loss.  Sounds like you are below the income threshold to take advantage of the tax loss.  You will most likely be limited to take a $25,000 active tax loss against your ordinary income against your W-2 and/or 1099 income.  Any loss over and above the $25,000 loss is carried forward until it is used (if you don't use it all by the time you sell it than it is added to the cost basis of the property in determining your gain or loss).  However, if you are a real estate professional like I am, I can go above and beyond the $25,000  active tax loss. 

4.  You actually pick from a few depreciation methods, including MACRS which is double declining (i.e. 2*cost basis/useful life).  If the refrigerator breaks the second year and you have to replace it then you can do one of two things...1. roll the undepreciated balance into the new refrigerator or 2. retire the asset and take the expense right away.  There is an additional depreciation schedule that will roll up into your schedule E for all your deprecable assets in your rental property.

If you have anymore specific questions feel free to PM or e-mail.