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2 replies

April 11, 2022

You cannot enter the improvements until the property is rented. Then you will enter the improvements and begin depreciation for those assets.

 

As long as the property is not available for rent, the asset of renovations holds until that day.  Once the property is available for rent again, then you will add all of the costs for renovation and enter that asset for depreciation with a starting date in 2022. Since you did have activity in 2021, you can continue with the expenses because the intent was not to remove it from service.

 

After you enter that the rental was not rented all year, do not enter any numbers for Days rented at a fair rental price or Personal use. The property will stay as a rental and you can deduct expenses like property taxes and insurance.

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Carl11_2
Employee
April 11, 2022

If your renovations were completed in 2021 and the property was not rented out or available for rent in 2021 after those renovations were completed, then you do not enter anything concerning those renovations in the assets/depreciation section. If the property becomes at least "available for rent" in 2022, then you will enter your renovations in the assets/depreciation section next year, when completing your 2022 tax return.