How do I handle HVAC system replaced on rental property?
That is a property improvement that gets capitalized and depreciated over 27.5 years. Enter it in the assets/depreciation section.
If you replaced the HVAC after the last renter moved out and before you sold the property, then you're not required to depreciate it (and you don't want to either). So to avoid that, classify the HVAC as "Residential Rental Real Estate", give it an in service date of anytime after that last renter moved out and before you closed on the sale. Then enter what you paid for it both the COST box and the COST OF LAND box. Since land is not depreciable, this ensures that it will not be depreciated. But it will allow for you to account for the cost of it to increase your total cost basis in the property, as it should.
