tax question on rental property?

Hello, in 2019 I did several capital improvements on a rental property. The cost was $21k, all of which was borrowed. In 2019 I paid off about $1400 in principal and $850 in interest. How do I handle this on my taxes? Since the money was borrowed but not paid by me yet, I assume I can't just do a normal cap ex for the $21k and depreciate it? What about the interest expense? Any guidance is appreciated, and yes I know I should get an accountant:)  Thank you

2 Answers

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  • 4 weeks ago

    You depreciate the improvement and deduct the interest.

  • Anonymous
    4 weeks ago

    Capital improvements are depreciated over 30 years for rental properties.  When you placed the unit in service, that's your start date.

    The principal is not deducted.  The interest is.

    IMO, get an extension and hire a professional.

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