I have a rental property which has been rented out since 2015, at the end of September 2019, the last tenant moved out, the property is terribly damaged, so I decided to do a total remodeling and then sell it. I hired a contractor start the remodeling in the middle of Nov 2019, and the remodeling is completed in early December, was put on market for sale before Christmas 2019, and finally sold in February 2020. I spent $18000 in the remodeling cost, now my question is how to report this $18000 on my tax return? Should I add it into 2019 tax return as depreciation, but choose "deduct the whole cost at once" with the section 179? Or can I just put this $18000 into my 2019 rental property expense? My confusion is the cost happens in 2019, but the house is sold in 2020, if I wait until i report 2020 tax return, can I still include this cost as cost basis for selling the property? Please help.
