I sold a rental property last year in Nov. The tenants moved out in July. I spent lots of money on painting/carpets/fixtures. Do I include these as rental expenses?
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I sold a rental property last year in Nov. The tenants moved out in July. I spent lots of money on painting/carpets/fixtures. Do I include these as rental expenses?

 
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New Member

I sold a rental property last year in Nov. The tenants moved out in July. I spent lots of money on painting/carpets/fixtures. Do I include these as rental expenses?

You can include painting in rental expenses, but the carpet and fixtures have to be added to TurboTax as an asset called Improvements.  This will add to your cost basis of the rental property. Since you sold it this year, it will have the same affect as an expense. It will decrease the gain (or increase the loss) on the sale of your property. 

TurboTax will walk you through the entering of the asset.

To enter the asset: 

  1. Click on Federal on the left of your screen, Under Wages & Income
  2. Scroll down to Rental Properties & Royalties (Sch E), click on Edit/Add 
  3. On the screen Rental and Royalty Summary, click on Edit next to your rental, assuming you already set this up
  4. On the Review of Your Rental Property screen, click Start next to Assets and depreciation
  5. Click Yes, on Do you want to go directly to your asset summary?
  6. On the screen Your Property Assets, click on + Add on Asset
  7. Choose Rental Real Estate Property 
  8. On the screen Tell Us a Little More About Your Rental Asset, choose Appliances, carpet, furniture
  9. On Tell Us About This Rental, enter the description (Improvements), cost and date purchased (date improvement completed)


 

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