Are you referring to painting a house?
Option 1
If the house is your home and all you did was paint the
exterior, then you don’t report the expense anywhere, because the cost of
painting is not deductible.
The IRS says of repairs to your home:
“Repairs versus improvements. A repair keeps your home in an
ordinary, efficient operating condition. It does not add to the value of your
home or prolong its life. Repairs
include repainting your home inside or outside, fixing your gutters or
floors, fixing leaks or plastering, and replacing broken window panes. You cannot deduct repair costs and
generally cannot add them to the basis of your home.”
https://www.irs.gov/publications/p530/ar02.html
Option 2
If the house is your home, and the painting of the exterior
was part of a larger renovation of the house, then the cost of painting (and
the other activities) are “capitalized”, that is, added to the basis of your
home. The basis will be used when you sell the house to compute your gain (your
gain is the sales price less your basis, more or less).
You don’t enter this in TurboTax, but you must track it
yourself until the year you sell your house.
Option 3
If the house is a rental property (even partly), then the
painting of the house is a rental expense and is reported on Schedule E under “Repairs
and Maintenance” under Expenses.
The IRS says:
“Repainting the exterior of your residential rental property:
By itself, the cost of painting the exterior of a building is generally a currently deductible repair
expense because merely painting isn't an improvement under the
capitalization rules.”
Option 4
If the house is a rental house, and the painting of the
exterior was part of a larger renovation of the rental house, then the cost of
painting (and the other activities) are “capitalized”, that is, added to the
basis of your rental house. The basis will be used when you sell the house to
compute your gain (your gain is the sales price less your adjusted basis, more
or less).
In TurboTax, assuming that you have already created an asset
to depreciate on your Schedule E (you would have done this in the first year
that you placed the rental house in service), then under Schedule E for this
house, you would click on Assets/Depreciation and walk through the interview, telling
the program that you have made an improvement. Note that you may be able to
deduct the expense for the improvement – answer the questions and see.
“Repainting
the exterior of your residential rental property
However, if the painting directly benefits or is incurred as
part of a larger project that's a capital improvement to the building
structure, then the cost of the painting is considered part of the capital
improvement and is subject to capitalization.”
For Options 3 and 4, please see
this IRS FAQ.
