Questions about my rental house - new patio and deck posts

Forum|Forum|6 years ago
February 2, 2020
1 reply
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I had two new support posts put on my deck at a total cost (materials and labor) of $1840. Is that an “improvement”? Would this fit under “Did you buy and items for any business, rental property, and/or farm that costs $2500 or less in 2019?” How do I put that in turbotax?

Also, I had a new patio installed for $2650. How do I put that in turbotax?

If this makes a difference, my answer is “no” to “The cost of all repairs, maintenance, and improvements is less than or equal to the smallest of these limits: 2% of unadjusted bias of your building or $10,000. “

Both jobs were done by the same company at the same time. Am I supposed to send them a 1099-MISC?

TurboTax Business Windows

Carl11_2

Employee

There is absolutely no question that you have property improvements here that need to be capitalized and depreciated over 27.5 years. They meet the definition of a property improvement without question. If the assets were placed "in service" on the same date, then you can combine them into a single entry in the Assets/Depreciation section. Classify it as Residential Rental Real Estate and you'll enter a zero in the "Cost of Land" box.

Property Improvement.

Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.

To be classified as a property improvement, two criteria must be met:

1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.

2) The improvement must add "real" value to the property. In other words, when the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.

Carl11_2

Employee

Oh yeah, you also do *NOT* have to send a 1099-MISC. You only do that if you qualify for QBI. With only one rental property I feel confident in stating that you do not qualify for QBI on this property.

LRC11

Pretty sure this advice is incorrect. Landlords must provide 1099s where required--not just QBI landlords. Paying by Paypal or a credit card is one way to avoid the requirement.