Schedule E deductions after conversion to short term rental

Forum|Forum|1 year ago
January 29, 2025
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I have a second home that was converted into a 100% short term rental at the beginning of 2024. The second home was constructed in 2023 during which time I purchased appliances, bedding, wall art, cookware, utensils, drapes, etc. for personal use. These items were then provided as part of the short term rental when it was put into service at the beginning of 2024. Which items can now be depreciated based on their FMV at the time of conversion? Can I expense any of the smaller items such as utensils on my 2024 Schedule E?

PatriciaV

Employee

Any items that have a useful life of at least one year should be depreciated, beginning on the in-service date (when the property was available to be rented). This category includes furniture, carpet, and appliances.

Items that are consumed or likely to last less than a year (which would include most household items) would be reported as rental expenses in the year the property was first made available to be rented.

More info from TurboTax Tax Tips: Tax Deductions for Rental Property Depreciation

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