How should I file my taxes???
I am amending my 2017 returns and filing my 2018 returns late.
In February 2017 I was not working and decided to renovate my home, Rental Property #1 myself from February 2017 thru September 2018. I placed the property on the rental market in October 2018. It rented for December 1, 2018 lease start date. I did extensive renovations: new kitchen & appliances, 2 gutted bathrooms + new fixtures, new staircase, new recessed lighting, new doors, custom closets, paint job, laundry room, etc.
In November of 2017, I bought Rental Property #2 - a 3-family rowhouse. I had tenant’s in place in November 2017. In October 2018, I began gut renovating the 3rd floor.
I list below the items I believe need to be depreciated over an IRS specified schedule. Do all these items fall under improvement? Or can some be regarded as expenses and deducted right away.
Improvements:
- Building materials: studs, sheetrock, fasteners, doors, plumbing pipes, etc
- Fixtures: Toilets, showers, vanities, tubs, lights, faucets, sinks
- Appliances: Stove, wall oven, fridge, dishwasher, washing machine, etc
- Kitchen cabinets & countertops
- Light fixtures
- Demolition
Tools & Equipment
I spent close to $11,000 on tools and equipment (drills, saws, ladders, etc) in 2017 and 2018. I used these tools on Rental Property #1 and Rental Property #2. I will use the tools on the next rental property I purchase. How should I report the tools to the IRS? As an expense or a depreciable item?
I put in over 2700 hours of labor (2017 & 2018) which is not reflected in any of the numbers below. How (if at all) can I expense my labor? Perhaps I cannot do it for tax years 2017 and 2018, but I’d like to do so going forward since this is my full time job. I have no other source of income other than the rental income from these rental properties.
