Investors & landlords

No, money spent / work done and sale of property were different tax years, so I'll have to depreciate all 4 major improvements.

If it is true that your property improvements were done "AFTER" the last renter moved out, and before the sale, then wait and enter the property improvements on the tax return for the tax year you actually sell/sold the property with an "in service" date of Jan 1 of that year. Then declare 1% business use. Then, there will be no depreciation since you don't depreciate assets held less than a year. The program "knows" this.

Do you agree with the line of thinking (@Carl) whereby I can claim "0%" business use (TT allows a minimum of 1.00%)  for 2018 (described above)? 

My testing with TTX 2018 shows that the program will not accept 0% business use when you have an "in service" date - a date that must be entered for a rental asset, no matter what.

The effects of that are 1) obviously, the improvements are added to the form 4562    2) the total depreciable basis is only 1% of the repairs' total cost.  How does that set me up for 2019 taxes when I show the sale of the property? 

Like I said, wait and enter the property improvements on the 2019 tax return. Then it really doesn't matter what percentage of busines use you show. If you sell the asset within the same tax year it's placed in service, it's not depreciated. But of course, you want to be as honest as you can on your tax return too. Since the program will not accept 0% business use, enter the lowest number it will accept. It won't be depreciated anyway provided the "in service" date and the sale date are in the same tax year.

Will I recoup the other 99% of the cost of the siding as an increase in my basis when the sale of the property fleshes out?  (They do tally under Cost (net of land) on form 4562.)

You'll see it listed as a separate item on the 4562 titled "Depreciation & Amortization Report" for that specific property. You'll also note there will be zero depreciation on it if the in service date and sale date are both in 2019.

My ignorance of depreciation, recapture, depleted assets, etc. and their end affect on basis for capital gains is limited, evident, and frustrating....  Luckily, this was an off year for our other income, so not having higher numbers in Current Depreciation are not affecting my overall bottom (tax) line much.

It took me a few year's of tax returns to get the hang of it and understand depreciation myself. The IRS rules on depreciation are convoluted at best. One would think that for an asset placed in service on a specific date, that the depreciation for that first year would be a percentage of the total days in the year the asset was in service. But that's not how it works. That first year of depreciation is based on what the IRS calls a "convention", and what convention is used depends on the date placed in service. Here's a few of the conventions used with rental property assets. You'll see these on the 4562 under the Method/Convention column. Under that column are two letters, a slash and two more letters. The convention is the letters to the right of the slash.

MM - Mid-Month

MQ - Mid-Quarter

HY - Half Year

A mid-month convention is used for all residential rental property and nonresidential real property. Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month.

Ok, your reply (@carl) hit a second before I posted above so I'll edit it...   Tree work was 2700, so I tried the Land Improvement treatment, and it ended up on a 15 yr schedule.  Oh well.

If I recall (without having to re-read this whole thread) the tree removal was actually more of a safety/security issue, than a property improvement. If so, I'd still expense it and label it something like "dead tree removal" to indicate that it is "in fact" an expense, and not an improvement to anything. Maybe you can come up with a better, more descriptive label fo the expense.

Keep in mind that it doesn't make any difference in your taxable gain if you list this as an asset, or claim it as an exepense. Either way it reduces your taxable gain on the sale. So use the KISS method. 🙂