Schedule E rental property and new construction

[xanman2112]

I built a home in 2021 to be used as an AirBnB.   I have determined that I should be using Schedule E to detail my income/expenses from my rental property.  The only problem is that the questions in Turbotax seemed to assume that I purchased an existing property.  For example, it wants me to use the "Purchase price" from my settlement statement...however, I got a construction loan and ended up putting up alot of my own money on top of that to complete the house construction project.  Should I include that in the purchase price?  Should this include costs of appliances and furniture?

Secondly, Schedule E has a section on "Improvements"... like adding new rooms, new deck, new roof, etc...  since this is a new construction... EVERYTHING was an improvement... so do I include all that in this section as well?

[ColeenD3]

If the entire building was constructed prior to placing it in service, then all your construction/purchase costs are included in the initial purchase price.

If after you place the property into service, you made an improvement, that is depreciated separately from the building.

Appliances and furniture are not part of the building cost, since they depreciate more quickly. Add each appliance, etc. separately.

[xanman2112]

Thank you @ColeenD3 !  When you say "Add each appliance, etc. separately"...where do I enter these costs?

[HelenC12]

For property/items places in service after you placed the rental in service, enter the items as an asset. You may elect to expense some of the items if they're $2,500 or less. See What can I expense or depreciate with the business safe harbor election?

Enter your cost basis for depreciation of an asset in the rental section of TurboTax.

1. Type rentals in the search bar and click on Jump to rentals.
2. On the Your 2021 rentals and royalties summary screen, Edit the property.
3. On the Here's XXX rental property info screen, scroll down to Expenses/Assets (Depreciation), Improvements, furnishings, and other assets, Edit.
4. On the Your improvements, furnishings, and other assets screen, select Add asset and Continue.
5. Continue until you get tot he Describe This Asset screen. Select the option that best describes this asset and Continue.
6. On the Tell Us About This Rental Asset screen, you'll be able to enter the basis and date purchase or acquired.
7. Continue with the onscreen interview until complete.

Related Information:

• What kinds of rental property expenses can I deduct?
• What is rental depreciation and how does it differ from an expense?
• How do I handle capital improvements and depreciation for my rental?
• Can I claim a security deposit?