I had a house that was 75% available for rent from Jan - Nov, then I turned it over to a property manager to be fully rented out for Dec. How do I enter this?

Forum|Forum|1 year ago
January 28, 2025
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Dec included quite a lot of expenses, so they should be 100% deductible, not 75% deductible. I'm not sure how to enter this Turbotax. If I let Turbotax automatically calculate it, won't it only count 75% instead of 100% of my December expenses when I turned it over to the property manager?

PatriciaV

Employee

Please clarify why the property was "75% available for rent." Was a portion occupied or being renovated during this time?

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verita87Author

It's a bedroom house. I occupied 1 bedroom as my primary residence and the other 3 bedrooms were available for rent. I'm previous years I entered that it was 75% rental property into turbo tax. Starting in Dec 2024 it was 100% available for rent since I moved out of state.

DianeW777

The best advice would be to continue your rental house, and any assets besides the house using the 75% rate for depreciation, Add a new asset for 2024 for the other 25%, with the same purchase date, and a new date it was converted to a rental property. This will provide the correct overall depreciation for both parts of the home. You do not want to disrupt the depreciation or the cost basis for the 75% you have already been using as a rental activity.

Keep in mind the cost of the recent 25% of the property will have a cost basis that is the lowest of actual cost or fair market value (FMV) on the date of conversion. Most likely the actual cost will be the lower of the two however I wanted you to be aware in the rare circumstance the reverse might be true.

The land can be left in the original rental and you don't need to be concerned about adding land in the second or more recent portion.

Simply add a new asset that is 100% rental and be sure to select that this property was converted from personal use to rental use. The link below may be helpful for both rentals.