Improvement expenses on property that was once primary residence, converted to rental and now vacant for past 2 yrs

Forum|Forum|4 years ago
April 11, 2022
1 reply
0 views

Hello and thanks in advance for your time reviewing this comment/question. I'm trying to determine if I can enter a several thousand dollar improvement expense on a property that was a primary residence, converted to a rental and has now been vacant for the past two years (not available for rent). We plan to sell it soon. My understanding is that the improvement expenses can be added to the cost basis for when we eventually do sell the home. Any comments that confirm or clarify this are appreciated.

As for the money recently spent in 2021 to improve the property, is there anything I should enter for 2021 taxes (property was vacant all year, not available for rent) to be able to add to the cost basis when we sell (hopefully in 2022)? My understanding is I can't list the property on a Schedule E because we did not actively rent in 2021. Do I just save the paperwork for the expenditure and add it to the cost basis when we do sell?

Thanks again for your time.

PattiF

Yes, you are correct that the improvements will be added to the cost basis when you sell the house in 2022. Save your paperwork and use the amounts when the house is sold.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"