Thank you for reply. I read your above answer three times and honestly, I still don't get it. I guess I may not express my original question clearly. Let me rephrase my question. If you could kindly answer it, I will definitely recommend it. I bought a rental home 5 years , installed a roof ($4,000 improvement) 3 years and sold this rental home last year,2018. The roof has been depreciated on tax returns over the years. For 2018 tax return, I add the original cost of roof back to the cost basis of rental home to reduce capital gain. My question is if I am doing so, how much sales price should I allocate to this depreciated roof? Should I give $0 sales price since I have added original cost of roof to cost basis of rental home? Thank you!
