Damage Deductions on Rental Propery

[AR_VA]

Dear Turbo Tax team,

During 2023, I made a home that I've lived in for 20+ years available for rent.  One of the screens in Turbo Tax asks, "Did you take any damage deductions for [the residence]?"  Is it asking if I've taken any damage deductions during the tax year or since the date of purchase?

Thank you for your assistance.  Blessings!

[marctu]

So we should start with this:  When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of the fair market value or adjusted basis on the date of conversion.  Due to the period of time that this was your primary home it is likely that the lesser amount is the adjusted basis on the date of the conversion.

So what is adjusted basis.   Your adjusted basis is generally your cost in acquiring your home plus the cost of any capital improvements you made, less casualty loss amounts and other decreases.  

So, the question is getting at the less casualty loss amounts and other decreases.  To answer your question it would be for the whole time of your ownership, which would be since the date of purchase.

Thank you for the opportunity to answer your questions @AR_VA 

All the best,

Marc T.

TurboTax Live Tax Expert