If it was advertised for rent on Dec 10, 2025, it was a rental in 2025.
1. The cash spent to purchase the property (Price plus selling costs if any) is your "Basis"
You will enter this basis when you setup the Rental, allocating a portion of the cost to the land and the rest to the building.
2. Landscaping would be considered a "Capital Improvement" and you would enter that as an additional asset. The program may give you an option to use Bonus Depreciation where the cost could be claimed in total, but aware that the loss may not benefit you if you had no rental income, in that case you might want to opt to have it depreciated over 20 years.
3. Property manager fees are listed as an expense against the rental.
4. When you paid the property tax in December for 2025, you can only claim your portion of the property tax which would be about 20 days worth of property tax. The Seller must have paid you at closing for their share of the property tax. Be sure to adjust your cost for the property for this, for example, you paid 500,000 for the property and the Sellers credited you 5,175 for property tax. You pay 494,825 cash at closing (plus closing costs) but you really paid 500,000 for the property because you took the liability of the unpaid property tax still due.
You pay 5,475 in December to the state for 2025 property tax due. you can only claim 300 for property tax expense.
5. You found a tenant in 2026, so you should start to report rent income for the rental on your 2026 return, but set it up on your 2025 return.
Everything is reported in the Rental Property Section, nothing concerning the rental gets reported under your personal Deductions & Credits.
First setup the rental in the Rental Section in TurboTax under the Income Section.
You are not a Real Estate Professional since you have a Property manager handling the rental but Yes, you materially participate (if you do things like approve the tenants)
You will continue through this interview answering Yes, it was a rental, Yes, ALL of 2025 (the entire time you owned it)
DO NOT leave the Rental Property section.
Scroll down to "Rental Income" if you had any, but in your case there would be none, so you can skip that and go to
"Sale of Property/ Depreciation"
This is important because you will list the land, the building, and, in your case, the landscaping. Each item or ASSET is given a value which is the same as your cost.
The building and landscaping will be depreciated, the land will not, land does not depreciate.
The depreciation for the rental assets is automatically calculated and will be listed on your Schedule E.
You will need to revisit this section in order to
1) Add an asset or
2) Report a sale of the property
Next go to "Expenses" (still in the Rental Property section) and enter the expenses such as Property Tax. The Property Tax paid on the rental is not listed a second time under your personal Deductions & Credits.
Finally, if you use your vehicle for managing the rental, you could enter that expense under "Vehicle Expenses"
Your return will generate Schedule E which will report all the rental activity.
The income or loss will be listed on Schedule 1 line 5 and flow to your 1040 line 8.
If the rental generates a loss, which for 2025 seems likely, the loss may be limited by your other income.
HERE is a link that explains more.
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