These remodeling costs (drywall & paint) would be considered
"Residential Rental Real Estate"
assets, however there may be a way to expense them.
Any improvements with a useful life of more than one year (e.g. deck, drywall, appliances, insulated windows, carpeting, kitchen cabinets/counters, bathtubs, tile-work, exterior paint) are entered as depreciable assets in the Assets/Depreciation interview screen found in Federal Taxes tab > Wages & Income category > Rental Properties and Royalties (Sched E) subcategory > Your Rental Summary.
You may, however, qualify to claim these improvements as expenses. See the attached screen shot for specifics.
