What improvements do I include in tax basis for sale of business property? What if they were included on past returns?

[jllewis119]

Property was inherited and rented in 2015. Stopped renting in Nov. 2017. Sold in Jan. 2018 for a profit. Never used as personal residence. 

[JulieR]

Generally, when property or other assets are inherited, the cost basis is usually equal to the fair market value of the property or asset at the time of the decedent's death or time of actual transfer. If you made a Capital Improvement  to the property before placing in service as a rental you would add the expenses of the capital improvement to the basis of the property. Do not add the capital expenses to the basis if you listed as assets on your return after the property was rented.

A capital improvement increases your property's value. According to the IRS, capital improvements have to last for more than one year and add value to your home, prolong its life, or adapt it to new uses.