Improvements to a Rental Property are reported under Assets/Depreciation from the Rental Summary screen (see screenshot below - click to enlarge).This year, you have the option to expense certain improvements under the SafeHarbor Election for Small Taxpayers. When you begin the Assets/Depreciation section, TurboTax will ask you about this. If you want to deduct the cost fully this year, answer "yes" to include the this election on your return.The requirements of this election are:Average annual gross receipts less than $10 million; andOwns or leases building property with an unadjusted basis of less than $1 million; andThe total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-Two percent of the unadjusted basis of the eligible building property; or$10,000If your improvements don't qualify, or you simply wish to depreciate the cost over 27.5 years, continue through the Depreciation interview to set up a new asset. Although it's not obvious, improvements are categorized as Rental Real Estate >> Residential Real Estate. (Land Improvements relate to additions like driveways, fences, patios, etc.) Improvements have Cost, but no "Cost for Land".If you qualify and chose the Safe Harbor Election for improvements, go to the Rental Expenses section and enter the cost under an appropriate category. If none fits, continue to the page titled "Any Other Expenses?" (screenshot #2) and enter your own description.

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ngooding1

Level 1

Question

How and where do I add improvements to rental property

Forum|Forum|7 years ago
June 6, 2019
10 replies
117 views

No text available

TurboTax Premier Online

PatriciaV

Level 15

Improvements to a Rental Property are reported under Assets/Depreciation from the Rental Summary screen (see screenshot below - click to enlarge).

This year, you have the option to expense certain improvements under the Safe Harbor Election for Small Taxpayers. When you begin the Assets/Depreciation section, TurboTax will ask you about this. If you want to deduct the cost fully this year, answer "yes" to include the this election on your return.

The requirements of this election are:

Average annual gross receipts less than $10 million; and
Owns or leases building property with an unadjusted basis of less than $1 million; and
The total amount paid during the taxable year for repairs, maintenance, improvements, or similar activities performed on such building property doesn't exceed the lesser of-
- Two percent of the unadjusted basis of the eligible building property; or
- $10,000

If your improvements don't qualify, or you simply wish to depreciate the cost over 27.5 years, continue through the Depreciation interview to set up a new asset. Although it's not obvious, improvements are categorized as Rental Real Estate >> Residential Real Estate. (Land Improvements relate to additions like driveways, fences, patios, etc.) Improvements have Cost, but no "Cost for Land".

If you qualify and chose the Safe Harbor Election for improvements, go to the Rental Expenses section and enter the cost under an appropriate category. If none fits, continue to the page titled "Any Other Expenses?" (screenshot #2) and enter your own description.

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TaxFiller4

Level 2

For rental property, I made home improvement expense in for selling for counter top and fence about 8K. Sold property in later half.

How can I show these expense so as to add to cost basis and not as repair expense.

I tried to enter as recommended in below link, but that did not increase my cost basis.
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3180448-how-and-where-do-i-add-improvements-to-rental-property">https://ttlc.intuit.com/questions/3180448-how-and-where-do-i-add-improvements-to-rental-property</a>

What I am doing wrong or what else I have to chose to make this work.

PatriciaV

Level 15

Here is the TurboTax article on capitalizing improvements:

How do I handle capital improvements and depreciation for my rental?

This is the Rental Property Summary page from TurboTax Desktop (TurboTax Online has a more detailed list; Assets appear near the bottom).

TTD Rental Summary Page

The Safe Harbor section has changed, but under Assets/Depreciation, you should see a question regarding Elections, which will take you to this page with the rules for expensing Improvements.

Rental Improvements Election

Finally, Miscellaneous Expenses can be added with a custom description on this page:

Rental Misc Expenses

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sand1tiger

Level 2

QUESTION - do all expenses and the get ready to sell expenses get somehow calculated behind the scenes to adjust the cost basis of the property to reduce the capital gain? by expenses I mean, new HVAC and water heater installed a couple of years ago, new dishwasher, washer/dryer and for get ready painting and small repairs.

Here is the information I have from turbotax - Thank you!

506,025.I bought a rental property for 464K 20 yrs ago and sold it last yr for 585K I show owing about 55K in federal taxes and 14K in state taxes

calculated as follows:

W-2Wages and tipsImportant:$123,322

1099-INTInterest incomeImportant:$111

1099-B Capital gains and lossesImportant:$257,519

Sch ERent, royalties,and passthroughsImportant:-$6,924

Belows is what shows as my cost:

Cost:
The amount you paid for it, plus freight, installation, sales tax, legal fees. Learn More
	464,000

Cost of Land:
If the cost of this property includes the land value, enter the land value here Learn More	58000

Date purchased or acquired: (mm/dd/yyyy)

5/10/2010

Depreciation is shown as 157K

Sale information below and shows as $25,031 plus $3,948 is for the commission fee for the realtors. Other expenses to get it ready I included as expenses.

Sales Information

Enter the following information about the sale of this asset. You must divide, or allocate the sales price and expenses between the land and the asset (improvement) based on their fair market values.

Asset Sales Price (Business Portion Only) $506,025.

Asset Sales Expenses (Business Portion Only $25,301.

Land Sales Price (Business Portion Only) $78,975.

Land Sales Expenses (Business Portion Only) $3,948.

LeonardS

Level 14

No, expenses to get ready to sell are not added to the adjusted basis. In general, these are repair expenses that you would do to maintain the home at a basic level and they are deducted as an expense.

A capital improvement is something that actually adds to the value of the home or increases its usefulness, and is added to the basis of the property. Some examples of capital improvements are:

Remodels and room additions (including decks and porches)
New or upgraded landscaping, irrigation, sprinkler system
Hardscape such as pavement, block or retaining wall, patio
Fencing
Swimming pool, spa
Storm windows, doors
New roof
Central vacuum or security system
Upgraded wiring, plumbing, ductwork
Central heating, AC, humidifier
New furnace, water heater
Filtration, soft-water, or septic system
Built-in appliances
New flooring or wall-to-wall carpeting
Upgraded insulation
Satellite dish

You will add the cost of capital improvements to the basis of your property.

From the information you have provided, it appears that your starting basis is $458200 (original cost - Land value). To this value you will add the cost of your capital improvements and the expense of the sale to determine your adjusted basis. You will enter this on the page Sales of Business or Rental Property in the box on the line Cost of Property (or Tax Basis) Plus Expenses of Sale