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What type of assets are these for my rental property?

Forum|Forum|4 years ago
February 25, 2022
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I have a rental condo that had a big renovation. I'm assuming all of these improvements are considered "assets."

The types of assets in turbotax are:

1. Rental Real Estate Property

2. Computer, Video, Photo and Telephone Equipment

3. Tools, Machinery, Equipment, Furniture

4. Intangibles, Other property

Can someone tell me how to categorize the expenses I had:

pool/spa/structure repair

plumbing

elevators/generator/fire & life safety/access

renovation

contingency (10%)

Thanks.

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Best answer by KrisD15

I would suggest you enter the amount of the assessment for repairs/maintenance as a repair or simply as an HOA fee expense.

You can also report the amount for improvements (but this would only be for a NEW elevator, when you never had one before, or a NEW pool) then claim "De Minimis Safe Harbor Election" which will treat each as an expense, meaning you'll take the full cost on your 2021 return.

Unless the improvement was inside the condo, I would not claim and then depreciate the asset. You would need to allocate part of the selling price to those assets when you sell the condo and try to clear them off the books.

If the expenses create a loss and the rental is a passive activity, you might have to carry some of the loss to future years.

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KrisD15

To clarify,

were these "Improvements" made to your condo specifically or to the common area?

Was the cost included in your HOA fees or a special assessment?

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J

JJ_1Author

@KrisD15 mainly common areas.