That was A LOT of help and I appreciate it. It does lead me to have a few more questions. First you mentioned that when I add the property for depreciation it is the selling price of $127500 PLUS the Property Improvements. Then later when you were explaining the definitions of RENTAL PROPERTY ASSETS/ MAINTENANCE/CLEANING/REPAIRS you stated that Property Improvements can be done any time after the initial purchase (which was in 2012) and that it doesn't matter if it was my residence or not. I just wanted to verify that the Property Improvements made BEFORE it became a rental are added to the $127500 correct? And anything done AFTER it became a rental is put in as an asset for depreciation the year that it was done (such as 2020)? Also, for anything that was done (Property Improvements) WHILE it was being PREPARED to become a rental, can that be added to the $127500 since technically it was still personal use?
Also, you had stated that it may not benefit me to even claim it as a converted rental this year since it sat empty and there was no rental income. My husband and my income combined is just under $150,000 (approx. $140K). We file married jointly but the rental is only in my name (I don't know if that makes a difference or not). My income from the rental next year will be $16,800. I had A LOT of expenses on the empty rental this year. I had to pay utilities all year. There were several large repairs that needed done and of course maintenance of the yard and landscaping, termite contract, taxes, interest, etc. (while it was available for rent). Without even putting in the value of my home yet to claim the depreciation, TurboTax has increased my refund over $2K. I imagine it will be even more after I enter the home asset for depreciation. First of all, is that correct since I had no passive income from it that it has increased my refund (I read somewhere you can't take deductions if you don't have any passive income)? Secondly, with our incomes as it is, will it hurt us down the road that much if I do sell the property (as you mentioned it may depending on our income but now I have provided that to you. Plus I imagine our income will be less when we retire)? I was told by a real estate friend (who has lots of rentals ) that I SHOULD claim it this year because of what I put out to upkeep it. Of course that is what he does for a living. I just want to do what is best and will get me the biggest refund on all the expenses I lost this year as it sat empty but I also don't want it to really hurt us down the road if it will make that much of a difference.
