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ggordon5
Level 3

How do I properly include improvements to a rental property in the same year i disposed of the property. When I enter them correctly, turbotax is not adjusting the basis?

 
2 Replies
MarilynG1
Expert Alumni

How do I properly include improvements to a rental property in the same year i disposed of the property. When I enter them correctly, turbotax is not adjusting the basis?

You are correct that Improvements to your Rental Property will increase the basis of the Sale Property.

 

If you entered the rental property and improvements  in the Sale of Property/Depreciation section, be sure you didn't elect to take the Improvements as Expenses and elected to Amortize them instead. The 'date you first started using' the Improvements should be prior to the Sale Date.

 

TurboTax asks about the Sale Price of the Asset (Improvements) and then about the Sale Price of the Home and the Land (since you indicated that they were both sold) and also Sales Expenses.

 

You can view the Home Sale Worksheet and also the Adjusted Basis of Home Sold Worksheet  when you View/Print your return.  If you are using the desktop product, you can click on FORMS to view and make entries.

 

Click this link for more info about Depreciable Basis.

 

 

 

 

 

 

 

 

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tagteam
Level 15

How do I properly include improvements to a rental property in the same year i disposed of the property. When I enter them correctly, turbotax is not adjusting the basis?

"When I enter them correctly, turbotax is not adjusting the basis?"

 

You can enter each improvement separately under Assets/Depreciation in the Rental Properties section of the program but then you will have to "sell" each one separately (i.e., assign a sales price to each asset) and you do not take a depreciation deduction for assets purchased and disposed of in the same tax year.

 

You can also add the total cost of all improvements made during 2019 (the year the improvement was made and the sale) to your cost basis in the program. You would add the improvements and cost manually and type that figure into the program. However, you need to note the accumulated depreciation figure prior to adding the cost of the improvements to your cost basis so that the cost of improvements are not calculated by the program for the purposes of depreciation. 

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