Foundation repair, newly installed gutters & in ground pipe

[AZ-Tax]

House purchased in 2004 and was used as residence until 11/2009. On 11/2009 house became rental and TP prepared his own 2009 Sch E and entered "foundation repair" and newly installed rain gutters and inground drain pipe as current expenses (no depreciating and not included in cost basis of house). 1st, I believe the TP was suppose to use the FMV of the rental house with lot as of 11/2009 then back out the lot. Then I would think the foundation repair and newly installed rain gutters and inground drain should have been added to the FMV of the house at 11/2009, correct?

[MilTaxEA]

Close, but not quite. The depreciable basis of the house is the lesser of the FMV when placed into service and the taxpayer's adjusted basis. If the foundation/gutters were added before the house was placed into service, it would be added to the adjusted basis for that computation. However, if they were installed after the house was placed into service, they would be depreciated separately.

[Gene V]

AZ, read Pub. 527, page 16 is a good place to start under

Basis of Property Changed to Rental Use

[Davc]

Correct......