In 2024 we inherited a 2 family home. One unit is rented at fair market value. A family member lives in the second unit rent free so it is considered personal use by us. We plan to sell it this year. When entering in the fixed asset information in the desktop rental property section, should I just enter 50% of the land and building adjusted basis and 100% of the expenses and have TT apply a 50% personal use percentage? That way TT only calculates depreciation on the rental portion of the home. I am familiar on how to adjust any expenses that may be 100% allocated to the rental activity in the schedule E worksheet.
Then when we sell the property enter 50% of the 1099s amount as sale of the rental property and 50% as sale of a personal residence at which time we will enter the basis for the personal portion? Basically treating the house as two separate properties for tax purposes the entire time. I am thinking about how the IRS may match up the 1099s amount to the return. Perhaps they only look at totals and not individual entries.
We don't plan to rent the unit where a family member lives.
Thank you
