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Level 2
posted Mar 30, 2022 6:59:30 PM

Proper way to categorize improvements for a vacation rental in turbotax

Within Turbotax when it asks how would you categorize this asset and gives options:

 

Residential Real Estate

Appliances, carpet, furniture

Land improvements

 

For a vacation rental on schedule E

 

 

What would you classify improvements such as

New light fixtures

New windows

New garage door opener

New nickel board wall paneling

New alarm system

New chimney cap and roof

New sewer line

New outdoor shower

New air conditioner

 

I assume new mattresses, beds, couches would go under appliances, carpet, furniture?

 

Can you take special depreciation on these?

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1 Replies
Expert Alumni
Mar 30, 2022 7:16:10 PM

Yes, I would classify them as "Appliances, Carpet, Furniture".  For any individual item that cost less than $2,500 you can elect the de minimus rule and expense those items.  TurboTax will ask you if you purchased any assets that cost $2,500 or less and give you the option to make the election.  For items more than $2,500 you will capitalize them, but if they qualify for bonus depreciation the program will give you the opportunity to elect that as well.