Thanks, Carl!! All that you've said makes sense, but it gets more confusing once I start going through turbotax.
So, I think one place I've gone wrong is to add any of the improvements I made as assets to the property in past returns. I should have added the ones that qualify to depreciate with the property, and not in this Section E Asset summary table. If I put in a radon system (a value of $1,800) before I listed it for rent, then that should not be listed in the Asset table. Is that correct?
Renter moved out mid-June and house closed end of November. It sat vacant in that time, part time on market and part time being renovated again. Individual renovations/payments in this period were all under $2,500, with the exception of one which was repairing window and wall from a leak and cost $2,551. Total renovation last year was about $7.5K. I assume these renovation costs go just into my cost basis (if I'm getting the terms right) so that I'm reducing any gross profits by this amount. Right?
