@zenmster wrote:
WAIT-this is a RENTAL PROPERTY. what is “somewhat different?” in your answer?!
For a rental property, you still have to allocate your cost between improvements, repairs, and selling expenses. But in the case of rental properties, the repairs can be deducted as a rental expense, assuming the house was actively being rented or marketed as a rental when you put it up for sale. Improvements increase your cost basis, and selling expenses reduce your net selling price, as before. (There is a reason that repairs are treated as a rental expense rather than an adjustment to capital gains, but I don't think I could do a good job of explaining it simply.)
