Rental Property Improved in 2021 but Sold in 2022

Forum|Forum|4 years ago
March 3, 2022
5 replies
30 views

I have a rental home. I rented it out for 2021. While it was a rental I made improvements to ready it for sale in 2021. It did not sell until February 2022. Do I have to input the improvements as expenses against the rental property in 2021 or can I input it as a deduction against the sale in 2022? Thanks!

Not A Product Question

DawnC

Level 15

Yes. Enter them on this tax return, 2021, since the expenses were made and improvements were done in 2021. You will report the sale on next year's return. But for this return, enter your rental income and expenses, including depreciation for 2021 on this tax return.

How do I handle capital improvements and depreciation for my rental? Capital improvements that add to the value of your rental property, prolong its life, or adapt it to new uses must be depreciated over a period of time rather than deducted as a current-year expense.

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