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Rental Property
Hello,
I have seen a couple of posts similar to my situation but since this is my first rental property, I want to be sure I’m understanding since I’m aware that things can get messy if taxes aren’t done correctly the first year.
I have a property that I bought in September 2022. Renovations started almost immediately, but didn’t finish until 2023. I put my first ad up for rent in March 2023. In 2022 I hired a construction company to do the renovation project, but I personally bought some stuff for the condo such as appliances, light fixtures, door handles, sink faucets etc. These items are where things get confusing for me as I’m not sure how or where to add them into taxes. I understand that I need to add the property to sched. E for 2023, but I’m not sure where to add those expenses incurred during 2022? Are those treated as renovation costs and added to cost basis for 2023, or should it be added another way? I am a little confused on what types of items qualify for cost basis for 2023 since I continued to buy items for the condo into 2023 as some of those items are also fixtures that will stay with the condo if/when I sell.
For extra transparency, this is a “mid-term” rental that I fully furnished and bought all furniture items (beds, couch, tvs, rug, linens, etc) in 2023. That’s where some of my confusion comes from since I believe most of those items are expenses and anything “fixed” to the condo would be seen as assets and would need to be depreciated with the condo over 27.5 years? TIA!