Hi,
Hoping someone might be able to help with an issue we are having that is similar to this post. We also sold a rental property in 2021 and are allocating the sales price across the home as the original asset and the improvements recorded as assets over the years. The improvements made to the property within one year of the sale date are showing as Ordinary Gains on Form 4797 and thus don't appear to be adding to the cost basis of the property overall. The property was rented up to and including the sale date, so we listed the date the improvement was finished as the date each improvement/asset was placed in service. Everything I have read indicates these improvements should add to the basis, so wondering if we are doing something wrong in entering these. Any thoughts? Thanks,
