How do I deduct my hand tools for my real estate practice and client party?

Question

Two in one question. I am a real estate broker and I manage properties. In the process I have to do repairs on certain properties and have purchased hand tools for this purchase. I don't want to have to capitalize and all that for a 3.99 screwdriver so how do I deduct these purchases.

Part two. If I throw a client party at my house, can I write off the entire amount or is it subject to the 50% entertainment stuff.

Thanks in advance for your answer.

I have several hand tools so the screwdriver is an example. I can't imagine I have to fill out a sect 179 deduction for each one

Answer 1

For these kinds of questions it is best to call: 1-800-829-1040 or do a search on the following website: www.irs.gov

Answer 2

You would deduct the hand tools on your Schedule C. You would have to do it under depreciation but you could deduct the entire amount by taking it as a Section 179 deduction. Kind of complicated, I know. Hope it means something to you. As for the client party, it would have to be subject to the 50% entertainment limitation since there is no other category that would cover it.

Answer 3

the tools absolutely, and for my clients i would ask if u have documentation for all of the exp of the party, i would put this under other expense and labeling it promotions and/or networking, if the party was for getting clients to gether so that u can produce the income it is a deduction, meals are at 50% because the irs sees it as u would have to eat anyway so just because u have a business dinner u only get 50% but with the party u would not be having it except for the purpse of generating revenue, just have documentation, receipts client list etc, also something alot of people sont knwo if u buy gifts for clients u r limited to $25/per gift per client, i hvae a cpl of realtors as clients who pay referral ans give gifts, the referral just need to be reasonable and consistant but the gifts do have a limit of 25....

Answer 4

Why would you want to deduct 3.99 screwdriver. It won't change your return. The party is subject to 50%

Answer 5

tools are a write off expense.
throwing parties and writeing them off thows up red flags



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Answer 6

Are you self-employed? If you are you can deduct tools and everything you use for your business on the Profit and Loss form. Hope this has help.

Answer 7

tools are a write off expense.
throwing parties and writeing them off thows up red flags and can cause and audit.