Sold Rental property

Forum|Forum|1 year ago
January 12, 2025
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I sold a rental property in 2024, owned for many years. Just prior to selling the property I had to bring the property up to sellable condition to get the best return on my sale. Where do I record the cost of improvements, new counter tops, new appliances, interior painting, new flooring/carpeting, new windows. The cost of these items is significant and really would like to reduce the capital gain of the sale by subtracting these items. Are these costs of sale (items completed only for sale) or assets to be depreciated (can I depreciate the entire cost of each item)?

mglauner

If you made improvements to your rental property after you stopped renting it, but prior to selling it, you can add those costs to your Cost Basis (remaining undepreciated balance) when you sell the home, or include them as Sales Expenses.

No depreciation involved here.

Here's more info on How Capital Gains are Taxed.