Depreciable asset?

[MeegsC]

We lived in our house until we moved out of the country (in 2016); we then rented it out. When our longtime tenants moved out, we put the house on the market. In order to complete the sale, we had to replace the septic system, which cost more than $20,000. This was determined and paid AFTER the tenants moved out. Can I list this as a depreciable asset?

[HelenC12]

Yes, the septic tank is an asset since it is for your rental. However, since you replaced the septic in preparation for selling the rental, you may add the $20,000+ cost of the improvement to the adjusted basis of the rental house when you sell it.

To report the sale of this property:

1. Type 'sale of business property' into the search box
2. Select 'Jump to sale of business property'

You will have to enter the amount of prior year depreciation by hand.  You can get that figure from your prior-year return.

Additional information: I sold my rental property. How do I report that?