I'm a new TurboTax user, so no taxes were filed in previous years using TT software.
I have a rental property that I've owned for about 5 years. In the first year, I spent a good amount of money to renovate the property.
Since I didn't use TT in previous years, it has no record of the improvements that I've made. How do I enter this into TT? Will that change the depreciation amount?
Also, if I sold a rental property this year (different property than the one mentioned above), I understand that I will have to pay capital gains tax on the profit from sale (sale price - closing costs - remaining mortgage - commissions). Will I also have to pay capital gains tax on the depreciation that I took since purchasing the rental property? Where do the improvements (eg new bathroom) get taken to account? What will happen to my carry forward losses?
Thank you!
