How do I categorize the cost of the demolition and removal of a leaking swimming pool from my rental property? Is that considered a misc expense or an improvement?

[Carl]

Was this an in-ground pool?

[bmwindes1]

Yes, an inground pool.

[Carl]

Then it's a property improvement. More specifically a land improvement since no structure exists in it's place after removal. When entering it in the Assets/Depreciation section classify it as land improvements. So on the first screen select "Rental Real Estate Property" and on the 2nd screen select "Land Improvements" and go from there. Note that there will be depreciation on this. If it qualifies for the special depreciation allowance the program will know. If offered that, I recommend you take it.

[Carl]

Only take the special depreciation allowance if (and only if) not taking it results in a taxable gain on the rental income. More than likely, you will not have a taxable gain. If you don't, then don't waste the special allowance on it.

[bmwindes1]

Thank you for the answer!