Yes, through depreciation. 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. A central AC unit qualifies as a capital improvement. The amount of depreciation expense will be prorated for the 27% of rental use, but TurboTax will do all the calculations.
To enter your rental improvements, simply follow the directions to enter your rental income and expenses. At some point, you'll come across the Rental Summary screen. Select Start next to Asset/Depreciation and follow the onscreen instructions. We'll figure out which depreciation method works best in your favor.
When you enter the asset, you will be able to take Bonus Depreciation for the unit if it qualifies you and the option benefits you. Bonus depreciation has been changed for qualified assets acquired and placed in service after September 27, 2017. The old rules of 50% bonus depreciation still apply for qualified assets acquired before September 28, 2017. These assets had to be purchased new, not used. The new rules allow for 100% bonus "expensing" of assets that are new or used. For more information, see Rental
Property & DEPRECIATION.
