Deduction of hot tub if bought 1 year before renta

Forum|Forum|1 year ago
August 4, 2024
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I built a deck and bought a hot tub in December 2023 on my primary residence at that time. I started a short term rental on that property in 2024. Can I deduct the hot tub and deck (for the hot tub) from my tax deductions in 2024 for the rental property?

M-MTax

Can I deduct the hot tub and deck (for the hot tub) from my tax deductions in 2024 for the rental property?

No. You take the cost of the hot tub and deck and add the total to your basis in the property and then take depreciation deductions based on that total over 27.5 years.

Example: Hot tub plus deck = $10,000 plus basis for depreciation of the property = amount you depreciate over 27.5 years and NOTE that your basis for depreciation will be the lesser of your adjusted cost basis OR the FMV on the date you converted the property to rental use.

TehaleonieAuthor

Thank you! But, is it still possible even though I bought the hot tub in December of 2023 and didn't start renting the place out until midway through 2024?

M-MTax

You can add the cost to your basis in the property but then you have to use the lesser of your adjusted basis in the property or the FMV on the date of conversion to rental use.