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spl930
New Member

Rental property capital improvements in same year as sale

If I make improvements to rental property in preparation for a sale, and complete the sale in the same year, do I need to calculate any capitalization or depreciation on those improvements? 

As far as I understand, I can just add them into my basis so it comes out of my net gain on the property with this proximity to sale.

Is that correct? 

1 Reply
view2
New Member

Rental property capital improvements in same year as sale

When the improvements are added as an asset in Turbotax , Turbotax  will take the improvements into considerations in computation of gain or loss.

IF.

The total sales price should be allocated among all the assets (land, rental property, improvements, etc.)

 If you have already allocated 100% of the sales price, then enter zero [entering the "0" will trigger the calculations] for these remaining assets and improvements.

Enter the date of sale (same as the rental property) for each asset/improvement.

Turbotax will automatically "write off" the remainder of the basis (cost minus depreciation). You don't have to manually do that.

You have to edit each asset that is listed for the rental property and enter the same date and the zero in the the sale section to have each asset to be used in the calculations.

 All assets will then be includes in disposition sale of rental property.
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