Yes, you have the proof you need to show the payment for remodel and if you paid for the materials you should use those receipts as well. Keep your records with your tax return to show should you need it later.
If the expenses were a capital improvement to the property then you would take the combined total and depreciate it like the original rental property with a new placed in service date, just like it was a new and separate asset. The placed in service date would be the day it was available for use or completed. Add a new asset by selecting that in your rental activity.
Another option if you qualify is the Safe Harbor Election for Small Taxpayers.
- Here are the rules you need to meet to take this election:
- Your gross receipts, including all your other income, are $10,000,000 or less.
- Your eligible building has an unadjusted basis of $1,000,000 or less.
- The cost of all repairs, maintenance and improvements is less than or equal to the smallest of these limits:
- 2% of the unadjusted basis of your building or
- $10,000
IRS definition of Structural components (for your review):
Parts that together form an entire structure, such as a building. The term includes those parts of a building such as walls, partitions, floors, and ceilings, as well as any permanent coverings such as paneling or tiling, windows and doors, and all components of a central air conditioning or heating system including motors, compressors, pipes, and ducts. It also includes plumbing fixtures such as sinks, bathtubs, electrical wiring and lighting fixtures, and other parts that form the structure.
Open your TurboTax return and go to your rental activity. The questions below come up in the asset section:
- When you come to the screen, Did you buy any items that each cost $2,500 or less in 2024? mark the Yes button and click Continue.
- On the screen Let's see if you qualify to deduct these items as expenses, mark both of the Yes buttons and click Continue.
- On the Now, let's review each item you bought screen, mark whether all your new assets cost $2500 or less.
- If you mark that every item cost $2,500 or less, you will be brought to the Rental Summary screen. You have elected the De Minimis Safe Harbor provision.
- If you mark that some cost above $2,500, you will be asked Did you make improvements to rental in 2024?
- If you say Yes, you will be taken through the screens for the Improvements election.
- If you say No, you will see the screen Do you have any items that aren't covered by your elections? Proceed through the screens to enter this asset if you choose to depreciate it instead of using the safe harbor. If you choose safe harbor follow the next steps.
- On the Rental Summary screen go to the Expenses section and click on the Start/Update box.
- Continue to the Any Other Expenses? screen and enter the description and amount paid for the assets. Click Continue when finished.
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