Just before my rental property was sold, I installed new carpet. How do I deduct it?

[Sunny2August]

A multi-year rental property was sold in 2021. Just before it was sold, I installed new carpet, which was less than $2,000. In filing tax, how do I do with the new carpet?

(1) Can it be deducted as expense?

(2) If it was seen as improvement, does the carpet needed to be depreciated but it had been only one or two months before the rental property was sold? 

(3) In TurboTax, where is the carpet entered (procedures)? 

Thank you very much for any of your advice.

[PattiF · Accepted solution]

Yes, the entire cost of the carpet can be deducted for 2021. It doesn't need to be depreciated as all of the depreciation would be taken in the year of the sale.

To enter your rental:

1. In TurboTax, search for rentals and select the Jump to link at the top of the search results.
2. Answer Yes to the question Did you have any rental or royalty income and expenses in 2021 for property you own?
3. Follow the on-screen instructions as you proceed through the rental and royalties section.
   • We'll ask you to enter general information about your rental (like description, address, and ownership percentage).
   • Eventually, you'll come to the Rental Summary screen, which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses.

The carpet will be entered as a repair.