@MG26 you "are" depreciating rental real estate. Anything that cost more than $2,500 and becomes "a physical part of" the structure (such as your new furnace) is considered to be residential rental real estate property. So in the COST box you enter what you paid for the new furnace (including shipping and installation), and in the COST OF LAND box you enter zero. Then press on. It gets depreciated over 27.5 years with depreciation on that specific asset (the furnace) starting on the date that asset was placed in service.
