Hi DianeW777 and experts:
When one converts a personal home to a rental home, and used only the purchase price as the cost base for depreciation, and did not include the renovation cost done before the start of the rental, and did not include the cost of purchase (such as legal fees and transfer tax), at the time of rental property sale a few years later, how do you handle these costs which was not included in the depreciation base for the rental property? Do you ignore to avoid complication and since it is only less tax savings for you? Do you have to change the accounting rule? Can you claim these costs separately?
My second question is how do you handle any seller credit or real estate broker credit at the time of purchase? Do you deduct them from the cost base of purchase? All the real estate taxes were based on the original purchase price and were not based on (purchase price - seller credit - real estate broker credit).
Thanks
