If one of the duplexes was available and advertised as available and ready for rent then the date it was ready and available is the 'date placed in service'. This is the key date when it should be listed on the tax return, regardless if it was actually rented in that tax year.
The depreciation begins in the month it was available for rental purposes, (not when repairs or capital improvements are being done to prepare it to be ready). Repairs, supplies, utilities, insurance property taxes can all be deducted from the date placed in service forward, as you continue to try to rent out the property. You can use the percentage that applies only to the duplex that will be rented for expenses that affect the entire property. You can use 100% of expenses that affect only the rental portion.
Separate the cost of the building by using square feet of the rental unit divided by the total square feet. If both units are identical you can simply split 50/50.
If you rent it for less than fair rental value then expenses and losses would be limited. There is no deduction for renting your property at below market value. In fact, the problem with not renting your property at Fair Rental Value (FRV) is that you aren't allowed to claim a loss if your expenses exceed your income.
@Joans1738
[Edited: 04/11/2022 | 12:36p PST]
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