Such expense is considered an improvement and must be capitalized (depreciated). You would enter the expense as an asset in the rental section.
Here
is how you enter rental assets and improvements:
1.
Select Federal Taxes (Business in
the Home & Business edition).
In Online TurboTax Premier, click the bars at the upper left corner to
show Federal Taxes on the selection list; enlarge the screen if
needed to show the left side selection list. If you don't see the menu bars, you
must first step through each of the interview screens in TurboTax.
2.
Select Business Income and Expenses and
in the next screen, click I'll choose what I work on.
3.
On the Your Income Summary screen
(TurboTax Premier edition) or the Your Business Income screen
(TurboTax Home & Business edition), scroll down to the Rentals and
Royalties group.
4.
Click Start/Update next to
the Rentals and Royalties line and step through the rental
interviews to the Your <name> Rental Summary screen.
If you have more than one rental entered, select the out-of-state property.
5.
Click the Start/Update button
next to each topic on the Your <name> Rental summary
screen to enter your rental income, expenses, assets, depreciation, and vehicle
expenses.
Choose:
·
X rental real estate property
·
X residential rental real estate
You will now have "another" 27.5 year
property for the improvement.
