Rental property Improvement expense - multiple payments that span tax years

[Michael_NC]

I bought a rental property back in June 2021 knowing that the majority of the
windows would need replacing.

In December 2021, I made a 50% down payment for the window costs so they could be ordered.
In January 2022, I had the windows installed and made the remaining balance payment in February 2022.

I'm attempting to enter the window down payment cost as a Rental Real Estate property depreciated

asset. Because the replacement windows were installed in January 2022 which is after the 2021 tax year, Turbo Tax will not accept a January 2022 date as the date that I first started using the windows for business.

Can I deduct the window down payment cost as a depreciated asset in 2021 or will I need to deduct the entire window cost as a depreciated asset in 2022?

[DianeW777 · Accepted solution]

The entire cost will be a 2022 asset.  When the windows were placed in service is the year you can take the depreciation deduction and add the capital improvement as an asset.  It's all about 'placed in service' date.

[Michael_NC]

Thanks Diane!

That is what I was concluding but wanted to be sure I wasn't missing something,

Your point about "placed in service date" helped to clarify my understanding.