fully depreciated rental property

Forum|Forum|2 years ago
March 27, 2024
1 reply
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If a rental property is already fully depreciated, and I then have a capital improvement, can this be reported as the start of a new cost basis ?

Depreciation

MinhT1

Yes, you can enter the capital improvement as a new asset and depreciate it over 27.5 years.

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midasAuthor

Thank you for the fast response ! Can I also ask how best to field the TT dialogue in reporting asset depreciation, to indicate a rental property which was rented out until 2008; and thereafter not in service (ie not advertised as available and no income reported) and converted for occasional personal use, until January 2023 when it was once more placed in service as a rental property?

JamesG1

In TurboTax Online, you are recording the capital improvement, payment recently made, as a depreciable asset.

Record the capital improvement as follows:

At the screen Describe the asset, select Rental Real Estate Property. Continue.
At the screen Tell us a little more about your rental asset, select Residential Rental Real Estate unless the capital improvement would qualify as Land improvements.
At the screen Tell us about this rental asset, enter description, cost and date of the capital improvement.
At the screen Tell us more about this rental asset, select I purchased this asset because you made a recent cash outlay for the capital improvement.
Have you used this item 100% for this business since you acquired it? This question refers to the new capital improvement. Select Yes, I've always used this item 100% for the time for this business. Enter January 1, 2023 as the date.
At the screen Asset Summary, the capital improvement should report 27.5 years to depreciate. A Land improvement would qualify for 15 years.