The unit was not in a rentable condition for the remainder of 2022, but does it stay "in service" anyway, so that 2022 improvement costs get added to the cost basis for 2022?
No. Nothing changes for your 2022 tax return. The improvement cost will be added to the SCH E Assets/Depreciation section on your 2023 return you will complete next year. The in service date for that property improvement will be the first day the property was "available for rent" in 2023. Depreciation of the capital improvements will start on that date.
