Investors & landlords

Improvements to a Rental Property are reported under Assets/Depreciation from the Rental Summary screen (see screenshot below - click to enlarge).

This year, you have the option to expense certain improvements under the Safe Harbor Election for Small Taxpayers. When you begin the Assets/Depreciation section, TurboTax will ask you about this. If you want to deduct the cost fully this year, answer "yes" to include the this election on your return.

The requirements of this election are:

• Average annual gross receipts less than $10 million; and
• Owns or leases building property with an unadjusted basis of less than $1 million; and
• The total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-
  • Two percent of the unadjusted basis of the eligible building property; or
  • $10,000
    

If your improvements don't qualify, or you simply wish to depreciate the cost over 27.5 years, continue through the Depreciation interview to set up a new asset. Although it's not obvious, improvements are categorized as Rental Real Estate >> Residential Real Estate. (Land Improvements relate to additions like driveways, fences, patios, etc.) Improvements have Cost, but no "Cost for Land".

If you qualify and chose the Safe Harbor Election for improvements, go to the Rental Expenses section and enter the cost under an appropriate category. If none fits, continue to the page titled "Any Other Expenses?" (screenshot #2) and enter your own description.