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Where to add renovations expenses on rental proper such as complete plumbing and electrical replacement, full kitchen and bathroom renovation

 
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3 Replies
KarenW
Intuit Alumni

Where to add renovations expenses on rental proper such as complete plumbing and electrical replacement, full kitchen and bathroom renovation

If renovations added value to your rental, then you would depreciate them under the Asset topic. For minor repairs, add those to repairs and maintenance.

Where to add renovations expenses on rental proper such as complete plumbing and electrical replacement, full kitchen and bathroom renovation

I added a partial second bathroom to the home and re-plumbed the entire house because the pipes were starting to leak.  I understand I would need to show this as a depreciable asset but the interview does not fit.  It is not new real estate or land improvement.  Do I put it down as new appliances?  How and where to I input this into Turbo Tax?  Thank you.

Carl
Level 15

Where to add renovations expenses on rental proper such as complete plumbing and electrical replacement, full kitchen and bathroom renovation

Your renovations/property improvements are "IN FACT" new. Brand spanking new. You didn't pay for "old" or "used" materials. Even if you did, it's "NEW" for that specific property as "YOU" have never ever in your life used any part of those improvements for your personal use. Not ever.

They are entered in the assets/depreciation section, and since those improvements are now "a physical part of" the property, they are classified as residential rental real estate and depreciated over 27.5 years starting from the date of completion or the date they were  placed "in service' for the use of a renter. (whichever occurred last)

All of the improvements you mentioned are without question, classified as "residential rental property" and depreciated over 27.5 years.

Most people don't realize it, but while a water heater may be thought of as an appliance that gets depreciated over 5 years, when you install a water heater in a rental property, it becomes "a physical part of" the plumbing system, which is already "a physical part of" the rental structure. Therefore it's classified as residential rental real estate and depreciated over 27.5 years.

 

 

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