@kawsock wrote:
I put a rental property in place in 2010, but had done quite a bit of improvements to the property before putting in service. I only put the cost of the unit on my depreciation schedule, and none of the improvements were recognized as an expense. I sold the property in 2019, can I claim the improvements as an increase to the basis at the time of the sale? These were all related to increasing the property's value (renovating interior, new appliances, etc.) that in hindsight I would think should be deducted.
Thanks!
Expenses to the property itself should have been part of the Basis that you depreciating. If you did not do that, you have not been taking enough depreciation. Yes, those items increase your Basis, BUT you also need to enter the depreciation that you SHOULD have taken. The end result is that you have been missing out on 9 years of depreciation for those improvements. Doing your taxes yourself seems to have cost you quite a bit of money in extra taxes.
As for things that are not part of the property itself (such as appliances), those too should have been depreciated. Those would have been fully depreciated by now, with a Basis of zero. So no, those don't increase your Basis now. But there is a provision to 'catch up' on that missed depreciation, but TurboTax does not support that and I would recommend a tax professional for that.
