I owned a house and moved out in January of 2014 and finished the upstairs of my house starting in February. The house did not start to rent until July of 2014. I have also replaced flooring and a fence. I have been depreciating the value of the house since I started renting it but never included the value of the improvements. I did this in hopes that when I sell, it would lower my capital gains I would have to pay taxes on, I would add the value of the improvements to my total costs at the point of sale. Is this allowed? Can I begin to add the value of the improvements to the value when depreciating going forward? Do I need to go back amend prior tax returns?
