I own 6 rental units in retirement and one unit has been tied up in a deep remodel reaching completion this year2024. That single family unit was built by me in younger days,then sold, and repurchased for 100%rental. As an elder DIY type, I have been very slow in completing improvements: a wing addition during COVID achieved final inspection in 2022; then a basement remodel with added entrance and radon abatement carried through 2023; 2024 has been consumed with revisions to solar operation and insulation panels and cosmetic woodwork and floors. All the while this remodel has been retarded by 3 turnovers and maintenance among the other rental units. I have been advised to just take basic expenses during the unoccupied work, example: ongoing annual depreciation $4812,Utility $933 and propTax $3015.
Now late in 2024 I will add a new depreciation schedule for the total addition,revision/improvements, when I formally advertise as ready for occupancy. After 8 years of rental and this period of DIY improvement I intend to rent it for at least 10 more years and this unit probably will probably be the last to be sold, because it is conveniently 2 doors from my home.
With each year of TUrbotaxDesktop the loss on this one unit has just been merged into the net income of the other units. On StepbyStep I simply report the unit as 100% rented because that is the purpose it had prior to remodel and will have on return to service.On stepbystep I check off no Passive Loss carryover as each year of $9000+ loss has been merged with my multiple schedule E's.
In my nonprofessional path as a rentee/landlord is this the right and simple model or is there some other treatment of major renovation that is 100% for rental?
