Improvements are listed as an asset and depreciated. They are part of your total rental income/loss, not a separate income entry. A loss on your federal return for a rental asset? You can only have a loss of $25,000 unless you are a real estate professional meeting the required time limits. Even if you are a real estate professional, the improvements are depreciated, not written off. I believe your return is not correct.
See About Publication 527, Residential Rental Property ... - IRS to verify that you are filing an accurate return.
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