Real estate improvements

[bookworm62]

We bought a house for a rental. We removed the carpet and refinished the hardwood floors. Do the associated costs (sand paper, lacquer thinner, polyurethane, etc.) qualify as an improvement? 

[MiriamF · Accepted solution]

If you made all these changes before you made the house available for rent, then they get added into the basis of the house as an improvement.

If  you refinished the floors after the house was made available for rent, then they are an expense, categorized as a repair.

This article explains more about how to categorize expenses for residential rental properties.