When we started renting a home 8 years ago we chose 40 year depreciation.
This year we made improvements to that home (which has been a rental throughout).
These are NOT items to deduct as maintenance or repair.
How to we indicate an increase in basis?
Do we just add a separate asset sheet and depreciate the improvement separately?
If I add a new asset (the improvements) for depreciation can I choose 40 yr again (or must I use the 27.5 default)?
Or can I add to the original basis and continue the depreciation on the original sheet (for the remaining 32 years)?
As a numerical example: Original Basis $200K (80K was land).
Of the $120 Structure value we have depreciated $20K so far (so the remaining basis as of today is $180 with 32 years left remaining).
This year I made $30K in improvements. Can I add it to my basis (increasing it to $210 - 80K still Land) and continue the depreciation? If so, where do I enter that increase (yes I have receipts for all the improvements).
Appreciate guidance
