Hi, I bought a two-family rental property in 2023 and had to gut it. The work is still ongoing now. I have had many expenses from holding costs, renovations, taxes, etc in both 2023 and 2024 but it wont be rented until 2025.
I want to confirm that the correct way to report these expenses for both years will be to wait until 2025 even to add the property to a return and add all of the expenses from the previous two years to the adjusted cost basis of the property on my 2025 return. Is that correct?
Thank you!
You'll need to sign in or create an account to connect with an expert.
Yes, take your cost basis (purchase price) and add the cost of all improvements to that cost.
The total will be your depreciable basis when the property is placed in service in 2025.
Is this true even though I elect to classify all of my rental properties as an enterprise and the rental income as Qualified Business Income?
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Suj59
New Member
NewbieRentalOwner
Level 2
dlukose
New Member
mschmidt515
New Member
Jack-1369
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.