Referring to the last paragraph, do you add those costs to the cost basis or elsewhere and how? I am also getting conflicting answers regarding if I should enter the sales of my rental under the business section or the Rental and Royalties one. I lived on my rental for the first 10 years after its acquisition, then rented it out for 20 years. The last tenant left in July 2020 and the property stayed vacant until I sold it in January 2021. My expenses were reported in my 2020 tax return. I have my depreciation and Amortization report for tax year 2020. I've noticed that only 2 assets were on the asset description: the structure and a carpet. I had other assets like some Windows covers(blind) and a refrigerator that was fully depreciated during the first 5 years of the rental. I wonder why they are not listed since the carpet is already fully depreciated as well. Is it because it is a part of the place and cannot be removed until replacement? The asset entry worksheet shows the townhouse price of 55k. The acquisition purchase was 53k. I added a Sunroom that cost 2k 3 months after moving in. I wonder If I should change the purchase price to reflect the true contract price and enter the 2k somewhere else as improvement. (Note that this money is already part of the depreciation basis) or leave it the way it is and explain the situation to the IRS if asked. At any rate, it would be added to the depreciation basis anyway. There are other parts of entering the sales of this rental that are very confusing to me like allocating a percentage to figure out my profit on the sale. Your help would be very much appreciated. thanks in advance.
