@gjgogol wrote:
in TT, under the Cost or other basis, do I include all capital improvements at their original value, or do I reduce original value of improvement to allow for the depreciation taken while I rented it? also, what specific items can i include in cost basis, e.g. closing cost when i purchased home; closing cost of selling home; points paid when i refinanced loan while renting it, etc?
You must account for depreciation but I'm not sure where. It's not an adjustment to cost basis, because depreciation recapture is taxed differently from ordinary capital gains. Was it a current rental on schedule E when you sold the home or previously a rental? You may also need to account for non-qualified use. I'm not sure who to call on who has used this part of the program. @VolvoGirl @Critter-3 @Hal_Al @macuser_22 ????
As for items from the closing costs that are allowable adjustments to basis, they are listed on page 8 of publication 523.
https://www.irs.gov/pub/irs-pdf/p523.pdf
