Investors & landlords

Let's get specific with each question. 

Yes, your amounts below would be included in the cost of the condo assuming the cost is less or equal to FMV.

• Question 1: Am I understanding the Turbo Tax instruction correctly that I will add the following as cost: 
  • 1. Purchase price of the condo 
  • 2. Fees that I incurred to purchase the condo such as transfer tax, title fee and other document/legal fees (If the $600 fee was considered a legal fee you can include it.

It depends.  If you did not add these improvements to the condo cost basis when you originally placed it in service (2016) and did not add them as a separate asset during the rental period you should enter then as a separate asset treated exactly as the condo asset has been treated as explained above. If they were always part of the cost of the condo as part of your rental asset then they should already be accounted for.

• Question 2: Can I add improvement done to the property before I started renting to the cost here?

Here is what is unclear:

1. Did you list your condo as an asset on your tax return for your rental activity on the date you began listing it as a rental in 2016?
2. If so, did you include the remodeling costs at the same time, included with the purchase price or as a separate asset?
3. Do you have any other assets listed for your condo rental?

For your gain to be applied correctly and for you to receive the best tax advantage this needs to be clear. 

@Tax2019Pay