Hi,
We constructed a new building on an existing lot (primary residence, backyard guest house, detached from the main house). The construction was done in 2017, guest house placed in service (rented 100%) in December 2017, the total cost was $250K.
It seems TurboTax would allow me to take special allowance of 100% and deduct the entire $250K as expense in the same year. If I select this new building to be "land improvement" then it's an expense. If I select "residential rental" then it gets depreciated over 27.5 years.
Does a new building qualify as "land improvement" for the purpose of this qualification? Is this really possible with the new tax law, to deduct as expense what used to be a capital expense that must be depreciated over time?
If it is possible to deduct the whole thing, can I carry the loss to FY2018 and deduct those against rental profits?
Thanks
