I have an LLC in california, single member. It is long term rental property. I made substantial renovations in the first 6 months of 2021 and then the "asset" was placed in service effective 6/30/2021. Rental income came in the second half of the year. Recording the income and the normal expenses is fine. But I'm having trouble properly recording the home improvements. I believe they should be recorded as an asset that then should be depreciated by turbotax.
When I go into the Business Assets section and enter a new asset (Property improvement contractor labor) and enter the cost (70k), I get 4 choices (1-computer, video, photo and telephone equipment, 2-Tools, machinery, equipment, furniture, 3-Real estate propery,4-Intangibles). I select 3 and enter the date of service. Then I get 3 choices (1-nonresidential real estate,2-qualified improvement property,3-specific qualified improvement). The improvement property description is correct for the work that was done, but since it says qualified the description says it should only cover renovation activity AFTER the asset was placed in service. With the Asset here being the House that is being rented, since the renovation was done before the asset was placed in service, this doesn't seem to make sense.
Help is greatly appreciated.
