I sold my rental property in 2020 after owning it for 15 years. Before selling, I spent about 45K on a major rehab. How do I add the cost of the improvement to the basis so that it's not counted toward capital gain? I tried adding the rehab as a new asset to the property, but TT is showing a very large capital gain that doesn't seem right. I feel like the capital gain should be reduced by the amount I spent on the improvement, but that doesn't seem to be the case.
Thanks for any help on this.
