What you need to do is capitalize all the expenses incurred as improvements since the property is not available for rent at the moment. First, you have to get the HUD-1 document where you could find details of the purchase of the property. This will be the initial depreciation basis but make sure the land is not set up to be depreciated. Then you will also include the improvements you are making on a separate line and set the amount up to be depreciated over the same number of years, that is 27.5 the same as the building. You will start the depreciation when the property is ready and available for rent.
Here's how to enter the depreciation:
Enter your rental property information through the TurboTax guided questions (or choose edit rental property if property is already listed) until you come to a screen that is titled, Your "rental property name" rental summary. You will enter your rental property house here under "assets/depreciation".
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