There is absolutely no question that you have property improvements here that need to be capitalized and depreciated over 27.5 years. They meet the definition of a property improvement without question. If the assets were placed "in service" on the same date, then you can combine them into a single entry in the Assets/Depreciation section. Classify it as Residential Rental Real Estate and you'll enter a zero in the "Cost of Land" box.
Property Improvement.
Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.
To be classified as a property improvement, two criteria must be met:
1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.
2) The improvement must add "real" value to the property. In other words, when the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.
