Question

renting out a mother -in-law suite attached to our home

Forum|Forum|6 years ago
March 12, 2020
1 reply
0 views

We have started renting out a suite attached to our home which we have lived in for 23 years. We spent $9000.00 on capital improvements such as heating and cooling system and parking pad and another $4000.00 on rehabbing and furnishing apartment. For 2019 we had only rented it out for 2 months for a total of $1800.00. How do we put all this into our taxes?

LeonardS

The capital improvements to the property are added to the cost basis of the property, the furnishings can be depreciated, the question you need to answer is was the rehabbing a capital improvement or ordinary repairs. If they were repairs they can be deducted as an expense against income. This information will be reported on Schedule E.

A capital improvement will either enhance the property's overall value, prolongs its useful life, or adapt it to new uses. If it does not meet the criteria for being a capital improvement, then it would be considered a repair.

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