@Carl thanks so much for such a detailed answer, i have followed the steps to put the remodel cost into my 2019 tax return, and it does show as cost basis as you mentioned. I have some additional questions:
1. Thanks for pointing out specifically what form is important to keep and file. I always purchase the Turbotax software each year, and start with importing last year's return. And I always use e-file for both Federal and State return. Is my understanding correct that if I use e-file option, Turbotax will take care of including all needed forms to submit to IRS for my 2020 return? I will definitely save a PDF copy of all the forms for my return as well.
2. As the $18000 remodeling cost has been added in my 2019 return as cost-basis, so in 2020 return, this cost basis will be offset the capital gains I have when I sell the property, correct? Also is the closing cost I paid when selling the property can also be used to offset the capital gain as well? Well, I am trying to offset the gains as much as I can so I don't have to pay too much capital gain tax in 2020.
3. You mentioned that the depreciation recapture will be added to my AGI, I have followed your advice to convert the property back to personal use on 10/1/2019, and I do see the property's its own depreciation reduced around 1K. So is there any other ways I can do to make less recaptured depreciation being added to my 2020 AGI?
Thanks again for your time and it's really helpful.
