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June 4, 2019
Question

We have a single mortgage that covers our personal home and our rental/guest house. How do I calculate depreciation on the rental house?

  • June 4, 2019
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1 reply

Employee
June 4, 2019

Depreciation is based on the value of the property not on the properties mortgage.  The basis for depreciation on your rental house will be the lower of its Fair Market Value (FMV) or its cost basis at the time the property was put into service as a rental. Rental residential properties are depreciated over  27.5 years.