But then there is something called improvements, and the improvements is just as much, making the assessed value $2x. she has no idea how this could be.

Spending money on improvements increases your cost basis, which lowers your taxable gain, but it doesn’t change the exchange rules.

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We bought an apartment complex, operated it, improved it, and sold it on terms.

We bought an apartment complex, operated it, improved it, and sold it on terms.

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If you made improvements after buying but before putting it in service, those might still qualify for 100% bonus depreciation under the new rules.

Then work backward: what level of improvement do those comps show, and what’s missing from your property?

Liability protection, especially if you’re holding multiple properties.Partnership structuring, if you’re investing with others.Cleaner separation of finances, if you use a business bank account and separate books.What You Could Do Next:If your goal is to deduct more, consider whether you (or your spouse) can meet REPS or STR criteria in the future.Speak with a real estate-focused CPA to double-check how those reno and repair costs were categorized (repairs vs. capital improvements), and how your passive losses were handled.This post does not create a CPA-Client relationship.

We’d like to use the previous rental income from the properties we’re looking at to help secure funding and we’d like to not put much if any down and refinance after improving the property a bit to increase value and get it where it appraises with more than 20% above purchase price to lose the PMI.