Question

rental and improvements

Forum|Forum|2 years ago
October 25, 2023
1 reply
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I have converted 1/2 my basement into a one bedroom apartment that I want to rent out when I'm ready. I started investing money into this project in late 2021, 2022. Even though I haven't rented it out yet, should I have claimed the improvements in 2022? I'm unsure if there is a stipulation that it needs to be rented out in the same year. Thanks!

Ask the Experts - Extension - Sept 2023

JanetB21

Hello hispalette,

Thanks for joining the event!

When your basement apartment is ready for rental, in addition to your income and expenses, you will claim depreciation for the value of the rental portion of your property. The improvements you have made will be added to that value then! This is a great article that helps explain depreciation: Rental Real Estate

Good Luck with your new rental!
JanetB211

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H

hispaletteAuthor

So, just to be crystal clear- I can claim my improvements from 2021, 2022, 2023 whenever I start renting the apartment?

JanetB21

Yes - Those improvements will be depreciated during the years you have the rental apartment. From the IRS " The cost of improvements is recovered through depreciation."
IRS RENTAL TIPS

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