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How do I expense a rental turned into air bnb w massive remodeling? I listed some under assets and it shows special depreciation. Also made unit a GBI safe harbor. Is this correct?

 
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1 Reply
KrisD15
Expert Alumni

How do I expense a rental turned into air bnb w massive remodeling? I listed some under assets and it shows special depreciation. Also made unit a GBI safe harbor. Is this correct?

To clarify, did you change the rental  (Schedule E) into a business (Schedule C)?

If yes, the rental would need to be converted, first to "personal use" to clear the schedule E and then as Business to add to schedule C.

The business basis would be the adjusted basis (cost less depreciation) plus the improvements. 

If repairs were done while it was available for rent, they might be expensed.

If remodeling was done while the building was not available for rent, the cost would be added to the basis. 

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