In 2024, I changed my principal residence to a rental and entered the adjusted basis info (original price, settlement costs, capital improvements cost). When separating the value of the land, I noticed that TT also factored the cost of the improvements. I can understand why purchase settlement costs get factored between land and structure for determining the basis for rental depreciation but why do capital improvements to the structure also get factored between land and structure? Seems like these capital improvements add no value to the land. Did I do something wrong?
