Carl
Level 15

Investors & landlords

By elaborate on the floors, I should probably have been more specific. If this was carpet, and you paid less than $2,500 for this, just expense it as a repair/maintenance expense. If these were wood floors or ceramic tile, if you only replaced the damaged pieces, it's a repair expense. But if you had to rip up the entire floor in that room and replace it with new wood or tile, that would be considered a property improvement regardless of it's cost. It would be entered in the assets/depreciation section, classified as rental property and set up for depreciation over 27.5 years. As a property improvement, you'd wait and enter it on your 2020 tax return - not your 2019 tax return. Here's why (it's a depreciation thing.)

Since the work was done after the last renter moved out, no depreciation would be required since the improvement was technically, never placed "in service". The way you do that is to give it the same value in the "cost" box and the "cost of land" box. Give it a business use percentage of 1% (one percent) with an in-service date that matches the date you closed on the sale. (this is why you can't enter the property improvement until you do the 2020 tax return.) That way, no errors are incorrectly generated by the program, and the reporting of the sale on the SCH D and 4797 will still be correct.