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The repairs are an expense, however, the improvements need to be added as an asset to properly account for them. Set up the asset and indicate that you disposed of the asset in the same year (2019). These amounts are added to the basis which will lower the gain on the sale. Home Improvements and Your Taxes
To enter your rental improvements, simply follow the directions to enter your rental income and expenses. At some point you'll come across the Rental Summary screen. Select Start next to Asset/Depreciation and follow the onscreen instructions. We'll figure out which depreciation method works best in your favor.
If the improvements were made in the same tax year as the property was sold then the costs are entered on the Sch E as repairs ... do NOT try to enter them as assets that got sold as the program will give you error messages that will haunt your dreams.
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