@JC117
You have options. The IRS allows you to expense tangible property up to $2,500 per item or invoice. It's known as the de minimis safe harbor. If you do that, you need to attach a statement to your tax return stating that you elected to use the safe harbor for that tax year. Therefore, you need to be consistent with applying the $2,500 threshold for items purchased throughout the year. You can't choose to expense to drill and capitalize (record as an asset) the racks. You can elect to apply the safe harbor one year and not the next or elect to use it every year.
You can also choose to capitalize the purchases and expense (depreciate) them over time. This may be advantageous if you expect your income to increase because tax deductions are more valuable the higher your income tax bracket. You can also capitalize the purchases and then depreciate them 100% using Section 179. Presumably, you have a CPA or tax accountant that can help you determine the best option. If you're unsure, you can record them as fixed assets when you purchase them and then reclassify them as expenses or apply Section 179 at year-end based on the advice of your CPA/tax accountant.
