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billandmp
Returning Member

Adding Renovation to the Depreciation Schedule

I have a rental townhome that I have rented since 2011.  In my depreciation schedule, I have the cost of the house when it was placed in service.  I have added landscaping, etc.  But when I get to this section "residential real estate OR appliances, carpet, furniture OR land improvements" -I'm not sure which I am supposed to click.   Real estate has the date I purchased, etc. That does not seem right.  Land improvements discusses sidewalks, etc, but this is interior.  Appliances, carpet and furniture seem only a subset of what I need to do.  Any advise or directions for filling this out would be helpful. 

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KurtL1
Expert Alumni

Adding Renovation to the Depreciation Schedule

Any major renovation to a rental property should be classified as residential rental property and depreciated over 27.5 years.

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2 Replies
KurtL1
Expert Alumni

Adding Renovation to the Depreciation Schedule

Any major renovation to a rental property should be classified as residential rental property and depreciated over 27.5 years.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Carl
Level 15

Adding Renovation to the Depreciation Schedule

All major improvements to rental property that become "a physical part of" the primary structure (including landscaping) are classified as Residential Rental Real Estate" and depreciated over 27.5 years. Since the land is not a depreciable asset, for landscaping improvements that would mean your "COST" and "COST OF LAND" would be identical, and nothing would be depreciated on that specific asset. But it would add to the cost basis as it should.

 

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