I've read various articles and posts related to the use of personal property in a rental real-estate property. Most refer to large items such as refrigerators, stoves, and such which must be depreciated. I haven't seen anything about smaller items used in the property such as small appliances, pillows, fake plants, pictures, lamps, etc. How are these handled when added to the property? Are they deductible in any way or do we just eat the cost?

Actually, all the items that you have mentioned, that is "small appliances, pillows, fake plants, pictures, lamps etc" generally are all deductible. A taxpayer may depreciate these items (considered an asset listed as a fixture) over the applicable depreciable method under MACRS method, modified accelerated cost recovery system, that is currently 7 years.

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It was my understanding that section 179 deduction couldn't be used in connection with rental real estate. And, although I haven't looked at the IRS list of depreciable items, I'm not sure that some of the smaller items have definable useful lives.

You are absolutely correct with reference to s179 rules, a taxpayer may not use s179 on property that is generally leased to another party, but of course there are exceptions such as for Hotel/ Motel Industry.

With respect to the smaller items which have no definable useful lives, I would consider using the MACRS 7 years. In these situations, the IRS would prefer that the taxpayer use a reasonable useful life, and based on the small nature of these assets, in my opinion they would fit this particular type of asset class.

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Thanks. What I'll probably do is set up a general asset account for these small items and use the suggested 7 yr schedule.