Question

Rental asset depreciation

Forum|Forum|3 years ago
January 20, 2023
1 reply
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Hi All,

I have a rental property. I added an ADU to the property. How do I claim it as asset depreciation? Would you please show me instruction from Turbo Tax?

Which one should I select from Turbo Tax:

1. Rental Real Estate Property:

. Land Improvements

. Real Estate Property

. Rental Property appliances, carpet, furnishings

Thank you,

M

TurboTax Home & Biz Windows

Carl11_2

Employee

An ADU is a dwelling, just like the house you rent out on the rental property is. If (and only if) that ADU is rented to the same entity that rents the primary rental structure, then it's added as an asset that's classified as residential rental real estate and depreciated over 27.5 years.

What's not clear, is if this ADU is on other rental property that you own, or maybe it's a separate structure on the same land as your primary residence or 2nd home. I'm making a lot of assumptions here. For all I know, this could be a property with two structures on it now, and each one is rented to a different person.