How to report an improvement of rental property that occurred in the same year the rental property was sold.

[of1]

1. Rental property was purchased 2022
2. Rental was improved in June 2024 (while tenant was still living in the property)
3. Rental was sold in December 2024
4. Rental property was always rented (never used for personal use)

   How to report the improvements : Selling expenses ?  Deprecated asset ? Repairs ?

   There is a complete inconsistency with  responses to similar questions in the community and it’s extremely frustrating.

    I’m using TT ONLINE and would like a step by step (screens included please) on how to properly report it.

[JamesG1]

Rental property improvements that are capitalized and depreciated are recorded as additional assets.  In TurboTax Online, access the rental assets as follows:

• Down the left side of the screen, click on Tax Home.
• Click on the down arrow to the right of Review.
• Click on the blue band labeled Review.
• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Rentals, Royalties, and Farm.  Select the down arrow to the right.
• Click to the right of Rental Properties and Royalties.
• At the screen Your 2024 rentals and royalties summary, click the pencil to the right.
• At the screen Here's rental property info, select Edit to the right of Assets Rental property.
• At the screen Your property assets, select Add an asset.
• Follow the screens to enter each asset.

Improvements and repairs that are expensed in the current year are reported in the current year.  At the screen Here's rental property info, select Add expense or asset, then select the appropriate title.

After all assets and expenses have been entered, return to Your Property Assets to report the sale of each asset.

Edit each asset which was sold.  At the screen Did You Stop Using This Asset in 2024? select Yes and answer the questions about the sale.

Expenses of sale may be reported at the screen Sales Information.

The sale of the rental assets will be recorded on IRS form 4797 Sales of Business Property on pages 1 and 2.

View the entries at Tax Tools / Tools / View Tax Summary / Preview my 1040.

View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.