How do you determine unadjusted basis for claiming rental improvements and repairs as expenses instead of depreciating them?

[ah]

Would the unadjusted basis be the cost of the home at purchase (when it was a primary residence and not rental), at initial service date of rental, or current cost? I assume you would just take the cost of the property listed on property taxes minus the land?

[HelenC12]

No, that is not your homes basis for depreciation. Per IRS Publication 527, Chapter 4, Page 15: When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of the fair market value or adjusted basis on the date of conversion. 

The basis for depreciation is the lesser of:

• The fair market value of the property on the date you changed it to rental use; or

• Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. For other increases and decreases to basis, see Adjusted Basis in chapter 2.

Additional information: Where do I enter income and expenses from a rental property?

[Carl]

I don't' see what the basis (adjusted or not) has to do with claiming property improvements and repairs.  First, repairs are a deductible expense in the year incurred. Period. They get reported in the rental expenses section.

Property improvements add to your cost basis. Property improvements are entered as physically separate items in the Assets/Depreciation section.

There are some types of property improvements that, if they cost less than $2,500 they can be expensed. But again, that has nothing to do with the basis of the property. You don't have to determine it, in order to claim the property improvement either as an asset if required, or as an expense if it qualifies.

[Anonymous_]

@ah 

You can determine your unadjusted basis be reviewing IRS Publication 946 (link below).

https://www.irs.gov/publications/p946#en_US_2019_publink1000107561

I believe you are referring to the Safe Harbor Election for Small Taxpayers.

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Sa...