I entered the cost of $15000 and the land value is 0 and date of purchase should be my remodeling completion date? (11-01-2021)?
That sounds right. I assume you classified it as residential rental real estate, which gets depreciated over 27.5 years, starting on the date placed in service. Note that the date placed "in service" is your date the work was completed at the earliest. Technically, it's the date the asset was "available to rent".
If the property was empty and you were either between renters, or advertising it for rent, then the in service date is either the date the work was completed, the the date it was available to be used by a renter - whichever is later.
I entered another item for driveway paving and chose the land improvement and it allowed a special one-time depreciation of $7000
I assume you classified that one as a land improvement, which gets depreciated over 15 years. If you elected the one time special depreciation allowance which allows you to depreciate all or part of the improvement in the first year, that's fine.
Just be aware that depreciation is not a permanent deduction. That depreciation will have to be recaptured at some point, basically when one of two things happens in your life.
1) You sell the property
2) You die.
Three things to keep in mind for depreciation recapture.
1) Recaptured depreciation is added to your AGI in the tax year it's recaptured.
2) You will be taxes on that recaptured depreciation in the tax year you sell the property.
3) That recaptured depreciation has the potential to bump you into the next higher tax bracket.
More than likely, taking the one time special depreciation allowance for $7000 does not help you tax-wise on your 2021 tax return. That's because by design, long term residential rental real estate operates at a loss every year.
When you add up the deductions of mortgage interest, property insurance, property taxes and add that to the depreciation you're required to take by law, those four items alone will most likely exceed your rental income for the entire year. Add to that the additional allowed rental expenses such as repairs and maintenance, and you're practically guaranteed to show a loss on line 26 of the SCH E.
When your rental losses exceed your rental income, up to $25K of those excess losses can be deducted from your other ordinary income provided your AGI does not exceed the income threshold for your filing status, and provided your have the other ordinary income to deduct the excess losses from.
After that, any left over losses are just carried forward to the next year.
