which covered roofing replacement, plumbing repairs, stairwell renovation, basement renovation, and masonry.
All of that clearly and undeniably meets the IRS definition of a property improvement. (Definition below). This adds to your cost basis of the property. No question about it. So the entire amount gets entered in the Assets/Depreciation section. Classified it as residential rental property and it gets depreciated over the next 27.5 years.
Property Improvement.
Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.
To be classified as a property improvement, two criteria must be met:
1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.
2) The improvement must add "real" value to the property. In other words, when the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.
