Yes, you should include all rental assets for your Rental Property on your return.
Typically, rental activity is reported on Schedule E, unless you are a real estate professional. If you aren't certain that you should report on Schedule C, you may wish to ask whomever prepared your prior return for an explanation.
In either case, your business/rental assets are reported under Assets/Depreciation, found on the summary page for your property. To find this in TurboTax Desktop, use the Find box at the right of the TurboTax header. Type in "depreciation" then choose the topic for your form (rental or self-employed business). Click the "jump to..." link to go to the start of this section.
In TurboTax Online, go to My Account in the TurboTax header. Choose "Tools" then "Topic Search." Type in "depreciation and amortization, [farm, rental, self-employed business]" (according to your business type). Then click the topic in the list to go directly to the start of that section.
If you have not yet set up your business/rental property, you will need to work through the setup first. Otherwise, choose the business/property you need to work on and click "edit/update." Work through the screens until you see the summary page (income, expenses, etc). Scroll down to Assets/Depreciation and click "start."
Follow the interview to add a new asset, report the cost basis and the prior depreciation as it appears on the Depreciation Report from your prior year return. TurboTax will handle the current year calculations for you. Depreciation may be the same or different each year, depending on the type of asset and the IRS rules for that category.
The
IRS has issued lengthy regulations explaining how to tell the difference
between repairs and improvements. Under these IRS rules,
a property is improved when it undergoes
a "betterment," an "adaptation," or a
"restoration." In
simple terms, any expenditures that improve the property (add to its potential
market value) must be capitalized and
depreciated. These costs add to the property basis and are entered as separate assets under
the Assets/Depreciation section.
A repair is any expenditure that is not an
improvement, but instead returns the property to its former condition. These
costs are entered under Repairs in the Expenses section of TurboTax.
Appliances may be depreciated or expensed. If you chose the Safe Harbor Election, you may expense any purchase of $2500 or less. This allows you to write off the expense in one year, rather than five years for depreciation.
If you have Passive Losses from this activity, you may enter that information in TurboTax as well. If you have passive income this year, the passive loss will be used to offset your income. Use the search box to find where to enter your passive loss.
When you sell the property, you will use the remaining basis in the property and all assets to offset the income from the sale, resulting in a capital gain or loss. Your entries over the years you own the property will determine the outcome of the sale, so be sure you are as accurate and complete as possible.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
