I've searched and searched for this answer, but haven't found a clear answer... how do I adjust cost basis for a rental house that sold but required >$100k repairs in the year it was sold to make it sellable?
Situation: bought the house for $349 in '11 and sold it for $725 in '21, and depreciated the house plus a 2 other assets over that period. I Spent months of 2020 fixing, updating, upgrading the house for sale after losing tenants early in 2020. I spent >$100k updating/fixing the house. So I want to adjust my cost basis to reflect the addition CAPEX spent in 2020.
What's unclear is how to update the cost basis, do I manually change the original purchase cost, or add more assets (though I'm not sure how that helps and if there's a way to add asset as part of the sale to reflect the change to cost basis), or add up all the costs and add as Expenses, or a combination of these options.
