Since you made improvements to a business property that you are renting, you can still claim these improvements, but the process is slightly different. Here’s how you can handle it in TurboTax:
- Leasehold Improvements: Improvements made to a rented property are considered leasehold improvements. These include new flooring, ceilings, and walls.
- Depreciation: Leasehold improvements must be depreciated over the lesser of the remaining lease term or their useful life. TurboTax will guide you through setting up these improvements as assets and selecting the appropriate depreciation method.
Entering Improvements: To enter your leasehold improvements, follow these steps:
- Open your return in TurboTax business
- Go to the Federal Business section.
- Select Business Deduction
- Choose Depreciation of An Asset
- Add a new asset and
- Then click other (Real Estate Property)
- Continue through select Qualified Leasehold Improvements.
- Enter the details of the improvements and follow the onscreen instructions to set up depreciation
For more detailed guidance, you can refer to the TurboTax article on handling capital improvements and depreciation
