How do I handle increases to business use percentage for depreciated items used in rental property?
The past several years, I've rented it a room in my house. I've claimed depreciation on several items such as a dishwasher (starting prior to the de minimis threshold increases) and listed the percentage business use the same as the percentage of the square footage that was exclusively used by my renter.
Question #1: This past tax year I got a second renter, so the amount of square footage that was exclusively rented increased. Am I supposed to increase the business use percentage on the depreciation for each item to match the currently rented %? Or am I stuck using the older smaller percentage from when I had only one roommate?
Question #2: Presuming I'm allowed to increase the business use percentage, what concerns me is that when doing so, when I switch over to Forms view and look at the depreciation summer, Turbo Tax had increased the column it calculated for allowable depreciation for prior years. It appears that it simply took the % I just entered and applied that calculation to all prior years. I'm concerned because A. If I were to continue depreciation at the larger percentage, eventually TurboTax might allow me to take too much depreciation since it incorrectly calculated the prior amount of allowable depreciation. How would this normally be handled?
Question 3: My real issue is that I ended up selling the house this past year (roommates moved with me to the new place) and dishwasher and other items were sold with the house. If I click Yes on the screen in TurboTax asking if Special Handling is required, then I don't know where to report the sale of the asset since it was sold for $0 included with the house. If I answer No, then Turbo Tax reports am inflated loss for to the fact that it incorrectly used my increased business use percentage, and since I didn't claim as much as it thinks I should have, it artificially increases the loss it wants to report which I know is incorrect. So how should I report the sale of the asset that were sold with the home included in the price of the home? Do I need to include the depreciation on these items with the depreciation taken on the building when I fill in the recapture information on the screen taking about the sale of my personal home? Should I just use the lower business use percentage so that I can click No on the special handling screen and let TurboTax handle it knowing that I'm not getting the full depreciation for this past tax year? Or what?