Adding First Rental Property Cost Basis Entry

Forum|Forum|3 years ago
March 10, 2023
3 replies
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Hello,

I have a rental property that I purchased this year. I setup the profile, but I was not asked to enter the value of the house or land. I also was not asked to input the various escrow costs that would be part of my cost basis. When setting up the profile I selected "New - 2022 was the first year I rented this property."

Where in the program is the cost basis for the property and for depreciation of the house set up?

TurboTax Home & Biz Windows

Best answer by Anonymous_

The Assets/Depreciation section.

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Anonymous_Answer

Employee

The Assets/Depreciation section.

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TryingToUseTTAuthor

Thank you. I'm a little confused. Off the bat I am asked if I bought any items for any business, rental property and/or farm that cost $2.500 or less in 2022. Of course I did as I am self-employed for my income. When I answer yes it asks on the next page if I want to deduct these items as an expense.

Is it referring to all the other items I entered or just this one, which will be the house, which of course I cannot expense. It then asks me if I want to make this annual election. Once again I'm not sure what it is referring to all the expense or the one I am about to enter..

Any help would be appreciated.

GeorgeM777

No, it's referring to only those items you purchased for $2,500 or less. Select Yes, if you want to deduct any item that costs $2,500 or less. Eventually, you should see the screen, Now, let's review each item you bought. Select the option that applies to you. On the screen Your Property Assets, you will probably see your rental property, and it is here that you will enter your other assets, i.e., the ones that cost $2,500 or less. Enter your information and at the screen, How Do You Want to Deduct this Item? you will see the various options available. Select one and eventually you will get back to the Your Property Asset screen. Here you can add additional assets. Repeat the same process for all of the items you purchased.

The election to deduct items that cost $2,500 can be done each year, hence the name annual election. However, once an item that costs $2,500 or less has been deducted, then that item can no longer be deducted. The annual election relates to items you think you may purchase in the future. If you select "yes" to the annual election question, you still retain the option not to use it in future years.

@TryingToUseTT

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mglauner

Enter your Rental Property in the Assets section, after completing the Property Profile.

Indicate 'Real Estate' and you will be asked for Cost Basis of both improvements and land. You can use a Property Tax Bill to determine % to allocate to each.

Add the purchase costs and value of any improvements to your Cost Basis. Your cost basis in the property is generally the amount that you paid for the property (your acquisition cost plus any expenses), including any money you borrowed to buy the place.

Here's detailed info on Rental Property.

@TryingToUseTT

knightrojan

There is no option to add this in Turbotax Online.

AnnetteB6

Please clarify what you are trying to add to your return. Are you working on rental income and expenses or self-employed business income and expenses?

@knightrojan

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TryingToUseTTAuthor

Rental Income. I think I have it figured out. When you setup a rental property you are not asked about the cost-basis. That only occurs when you set it up as an Asset under Assets and Depreciation. Is that your understanding?