Question

ADU built as for-profit rental

Forum|Forum|3 years ago
April 13, 2023
1 reply
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I'm a retired building contractor. I completed the construction of a new "for-profit", detached, single family residence on the back of our property. My wife and I live in the primary residence on the same property.

The ADU was ready for occupancy Sept. 1, 2022 and we started collecting rent at that time. Electrical and gas services are on the same meter. We also share internet service.

From reading earlier posts I think I understand that the total construction cost (with land cost at 0) is entererd as the basis for a new asset and will be depreciated over 27.5 years. Depreciation should begin on Sept.1, 2022. So far so good?

D

DavidD66

You seem to have good grasp what you need to set up your rental. You can also start allocating your costs such as property tax, utilities, etc as of September 1, 2022 if that was the date the property was made available for rent. So far, so good.

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