depreciating a portion of personal residence
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New Member

depreciating a portion of personal residence

How do I depreciate my personal residence used for Airbnb business?  Turbo tax only shows options for "nonresidential" real estate.  I had an accountant file for me last year and they were able to depreciate my home as a personal residence with a 27.5 recovery period.  Turbo tax is forcing me to select non residential with a 39 year recovery period - giving me a much smaller deduction.  

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Expert Alumni

depreciating a portion of personal residence

You should be able to select residential real estate and the 27.5 year recovery period. 

 

Try going back in and reviewing your depreciation entries.

 

To do this in TurboTax

 

Enter Rental Property into the search box

Select Jump to rental property

Say yes to Do you want to review your rental and royalty information

Select Edit next to Assets/Depreciation

 

Go through the screens to edit your depreciation information.

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New Member

depreciating a portion of personal residence

Thanks for the quick response.  Unfortunately, I think this advice has me going through schedule E.  I'm trying to use schedule c for my Airbnb business.  I did this last year and was able to depreciate my personal residence for the percentage time that i rented the house.  I was able to depreciate the property as a personal residence for 27.5 years.  When I try to duplicate this with turbo tax on schedule C, it does not give me the option to select "residential property" - which is what I used last year on schedule C.  The only option i have is to select "non residential" which depreciates over 39 years, giving me a much smaller deduction.   I'm stuck..

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Expert Alumni

depreciating a portion of personal residence

Many people file their AirBNB income on Schedule E. That is where you will find the 27.5 year depreciation for a home.

 

Depending on how you run your Airbnb business, you have to report your income on either Schedule C or  schedule E. The distinction is based on how actively you are involved in running your Airbnb business and what services you offer.

Schedule E is meant for passive income. If you are just renting out a space and you do not offer any additional services (cooking, cleaning services, maid service etc) then you should report on Schedule E.

 

If you do provide services, like a hotel or B&B would, then you report on Schedule C.

The main difference between these schedules is that under Schedule C you are subject to self-employment tax and under Schedule E you are most likely subject to Passive Activity Loss Limitations, which means that your rental deductions cannot exceed your rental income. In other words, the IRS assumes you’re never running at a loss. If you’re not, then you can deduct up to $25,000 regardless of your income.

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