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No, don't add the January capital improvements to your cost basis. Enter each of the capital improvements as an asset. For the Date purchased or acquired, enter the sale date (February 2021).
Please see my previous post on how to enter the sale of a rental. Click here.
Some items to remember as you enter your rental sale:
This does not help me. I know how to enter the sales information for the rental. However, if I add an asset (heating system) there are a series of questions that follow in the screens. It asks me about the sales price of the asset; date it was sold, The sales price and the expenses. I don't know what to put in. Is the sales price of the asset (the heating system) the same price I paid for it? It also asks me to allocate my expenses. Not sure what I do here.
You have a choice to allocate the sales proceeds between the rental property and the new HVAC or to report zero sales proceeds for the HVAC. Either way, report only the actual total proceeds you received. Selling expenses would be handled the same way.
Thanks
A few questions:
1. All capital improvements should be in the 'Your Property Assets' screen?
2. Should I mark the capital improvements as 'Sold' on the same date that the rental property was sold?
3. If yes above, can I just put 0 for the sales proceeds and expenses?
Thank you.
Capital improvements are added to the basis of your vacant land.
To report the sale of your vacant land in TurboTax follow these steps:
Vacant land not used for investments purposes is personal use of a capital asset. A gain on the sale is reportable income, but a loss is NOT deductible
This link Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes? has information you may find useful.
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