How do I fill out the depreciation section as an owner occupant of a two family rental property (Rental property assets section new property)

Forum|Forum|3 years ago
April 5, 2023
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Hi,

I am purchased a two-family home in 2022 to house hack (one unit as primary residence, one unit as a rental). As an owner occupant landlord, it has been difficult to fill out the rental property section of TurboTax. I have finally figured out the expenses by splitting what is applicable to the whole house and keeping what is applicable to rental unit.

However, I am not certain how to fill out the cost basis and depreciation section. Should I fill with the purchase price, fair market value, and assessed value of land vs building with the values that are available for the whole property or divide all those in half to account for only the rental portion of the property?

TurboTax Premier Online

AnnetteB6

In order to plan ahead for the time when you may move out of your half of the property and convert it to a rental, you should treat each half of the building as its own entity within your tax return.

Therefore, when entering information for depreciation of the rental portion, divide the purchase price, fair market value, and value of land in half. The other half of those figures will stay with your residential portion for now. By doing this, you will depreciate 100% of the rental side of the property, but the starting point is half of the total cost.

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