Adjusting cost basis for rental after improvements

[RainyCity]

Hi, I have a property that has been rented out for the last few years, and claiming depreciation has been straightforward so far in TT. In 2021, I had to replace the whole deck with a deck using upgraded materials. I know I need to add this as an additional asset to depreciate in TT, but I’m not sure how/where in TT I would adjust the original cost basis of the property to account for the fact that the old deck was disposed of (before it’s 27.5year recovery period) Appreciate your help community!

[ColeenD3]

You can indicate that it was "sold" for $0.

You will first show this on the screen below.

[RainyCity]

Hi, @ColeenD3!

I never listed the original deck as a separate asset when I initially entered my rental property in TT. Would I make a new entry for the "old deck"? Do I need to adjust the main residence asset? Trying to understand the context I would bring up this screen you provided.

[ColeenD3]

No, if you never entered it as a separate asset, you can't treat it as separate now. Just enter the new deck and start depreciating it. 

[RainyCity]

Thanks @ColeenD3,

Just to make sure I'm clear. 

1. Don't mess with the existing asset that represents the rental.

2. Add new deck as asset to start deprecating.

Are both points correct?

[ColeenD3]

Yes. There is no real way to disengage an asset that was part of the original house. So:

1. Don't mess with the existing asset that represents the rental. Correct

2. Add new deck as asset to start depreciating. Correct

[HelenC12]

Yes, @ColeenD3 is correct about both points. Capital improvements that add to the value of your rental property, prolong its life, or adapt it to new uses must be depreciated over a period of time rather than deducted as a current-year expense. 

1. Don't mess with the existing asset that represents the rental.
2. Add new deck as asset to start deprecating.

Additional information: How do I handle capital improvements and depreciation for my rental?