New Rental property

[rm1177]

I just bought rental property end of 2021 and spent 2 months to do upgrades etc. I never rented the house in 2021 since i was upgrading the property. Where do i enter my rental expenses in Turbo Tax home and business? Should i just enter under "Rental" but for rental income, just leave it ZERO? Please help. Thanks

[ThomasM125]

Yes, you would set the property up as a rental property in TurboTax and leave the rent income blank.  Major improvements to the property should be set up as assets and be depreciated over time as opposed to being expensed in the current year.

@rm1177

[Edited 3/15/22 at 5:53 PM EST]

[rm1177]

What do you mean overtime? I spent lot of money on replacing all appliances and flooring in the new property. Should i not expense those for 2021? They were all done before Dec 2021. Thanks

[Carl]

I just bought rental property end of 2021 and spent 2 months to do upgrades etc.

It's important to understand just what you mean by "upgrades". I'm assuming you mean property improvements, which are completely different from repairs and maintenance expenses.

I never rented the house in 2021 since i was upgrading the property.

If the property was not "move in ready" on or before Jan 1, 2021 then the property was not "in service" in 2021. With that, there's absolutely no need to enter anything concerning this property on SCH E on the 2021 tax return.

The only things you can claim for this property on your 2021 tax return, are property taxes and mortgage interest. That's it. But don't fret, as you don't lose all the other stuff. You just can't claim the "other stuff" until you file the 2022 tax return when the property is placed "in service".  So keep all paperwork, receipts and every scrap of paper you have on this property, with your 2022 tax information so you'll have it next year.