Real Estate Brokers Legally Examining Their “Materials and Supplies”

by Isaac Benmergui, Esq on December 26, 2013

First off, what are they, legally? That’s a good question, as with respect to real estate law, it’s a handy thing for any real estate broker to know regarding taxes and such. You certainly wouldn’t want to wrongfully claim deductions on anything that legally cannot be considered as “materials and supplies.” So pay close attention here:

If you want the basic, plain-language definition, “materials and supplies” are simply tangible items of property outside of anything inventory for sale to customers. That could include any of these possibilities:cleaning supplies

  • Property Costing $200 or Less to Acquire or Produce
  • Component Parts for Maintenance and Repair of Property
  • Stationary and Cleaning Supplies (Items With a “Useful” Life of 12 Months or Less)
  • Fuel, Lubricants, Water and Other Consumables Within 12 Months or Less

There are other possible items listed under IRS regulations, but there you have it. As a real estate broker, you can deduct any of these items on your taxes, and that’s specifically beneficial for the most important item: property costing $200 or less. For example, if you wanted to buy, say 20 cell phones, each costing maybe $189.99, because of the law, you can deduct each one on your taxes.

To make it even better, properties valued at more than $200 can still be deducted as long as they’re utilized to maintain existing structures or items. Spare or replacement parts can be examples of that. Bear that in mind if trying to maintain your real estate properties for rental, maximizing your finances through tax benefits.

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