Hello. I built an addition onto my primary residence with its own private entrance. The new apartment has been solely used for short term rentals and has never been owner occupied except for a bedroom that used to be part of the main house but is now used only for the apartment. It was completed and put into service in 2024. When determining the Basis for depreciation, do I use only the building costs of the addition minus the land and put it at 100% business use, or do I include the main part of the house with its original purchase price and 45% business use for the apartment? If I include the main part of the house that I live in, would I add on the cost of improvements we made over the years such as a new roof and new windows for the depreciation basis?
