We did some work in our rental house ($12K) to include installing flooring, painting, new countertop in the kitchen, backsplash, new vanities in the bathroom. No new appliances. I only have one cost as this included parts and labor. Can I just enter one entry as a remodel for $12K under assets? I tells me I can take a $2K deduction every year for 5 years. Is the the right way to do it? Should these improvments always be depreciated?
Yes, rental improvements should be depreciated since they improve the life of your rental over several years. Therefore, you would take a portion of the depreciation each year as you use the improvements.
Please see the link below for more details on how this process works. You will also see the steps to report this in TurboTax in the link.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Can I just enter one entry as a remodel for $12K under assets?
Yes. Since you have only one bill for everything including the painting, that pretty much confirms your painting was "a part of" the property improvements. Just enter everything as one item (assuming it's all placed in service on the same date) in the assets/depreciation section, classify it as residential rental real estate, and it gets depreciated over the next 27.5 years.
Yep. For "almost" any asset classified as residential rental real estate, it's purchased new. Your cost basis includes the cost of the materials, installation and labor, shipping, permits, and any other costs associated with the property improvement.