I purchased a primary residence in 1988 and paid $112,500. I have now realized that I should have entered the FMV of the property when I started renting it.
For the property itself,you use the "LOWER" of what you paid for it, or it's FMV at the time of conversion. Since $112,500 was the "LESSER" amount, you did that correctly.
There were substantial repairs and remodeling done while living there, but I did not keep track of them.
There is a defined difference between "repairs" and "remodel". Remodeling is more commonly referred to as "renovation costs".
I converted it to a rental property in April 2000. At the time I entered the purchase price of $112,500 and allocated 12% ($13,500) to the land. I have used TT throughout the entire rental process. I sold the property in April 2021 for $442,000.
That's to bad unfortunately. Renovation costs incurred before the property was converted to a rental should have been added to the cost basis of the structure at the time of conversion. Renovations done after the property was converted to a rental are added as their own asset entry and depreciated over time. Since you did not do that, You can either report the sale using your original cost basis as entered, or you can add the assets now, and you are required to recapture and pay taxes on the depreciation you "should" have taken, but did not.
Other than that, professional help would be called for. Especially if you don't have the means to prove what you paid for your property improvements. (Proof would only be needed if you were audited on this)
