Thank you!
After the tenant moved out, we made all the improvements, including replacing carpet, painting and fixing that wall in order to sell the property. It's in escrow right now and final signing is in a little over a week.
Based on the information you provided and going back through TurboTax, looks like I should completely delete it from the 2023 return. This is what I had done, initially. I will include it in 2024 return to report the sale and at that time can include the capital improvements.
TurboTax message:
"Since this property was not a rental at all in 2023, you should delete it as a rental. Make sure to keep your complete return, including the Depreciation Report for this property from 2022 (or the last year was used as a rental). You'll need that information when you sell the property or convert it back to a rental."
