Get your taxes done using TurboTax
Capital improvements are added in as additional assets that need to be depreciated. Each improvement needs to be accounted for and depreciated. Mortgage interest is an expense that can be added.
- In TurboTax, go to federal>wages and income>see all income>Rentals, Royalties, and Farm>Rental Properties and Royalties (Sch E)>start or revisit
- Answer Yes to the question Did you have any rental or royalty income and expenses in 2020 for property you own?
- Follow the on-screen instructions as you proceed through the rental and royalties section.
- We'll ask you to enter general information about your rental (like description, address, and ownership percentage). You will also be given the opportunity to report when the conversion was made from your personal residence to a rental.
- You will eventually reach a screen that says Do Any of These Situations Apply to This Property? here is where you indicate you sold the property. Then you will enter information about how long it was rented .
- Eventually, you'll come to the Rental Summary screen, which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses. Here is what the screen will look like. From this screen, you can enter all your expenses plus your improvements (assets).
