Hi, thank you for a very detailed instructions, I greatly appreciate the effort. The situation is a bit more complex, here is how : The main house is a 1,366 sqft 4 bedroom house, bought and moved into in 2015. In the same year we started doing AirBNB vacation rentals out of 2 spare bedrooms, and have reported all income and claimed relevant maintenance, utilities, repair costs at 50% since then. We've had a few major improvements in 2016 (patio covers, concrete walkways, fire pit etc.) which were claimed on tax return and are being depreciated as per whatever rules Turbotax applies to that.
In Dec 2017, we closed the main house and opened the guest house for vacation rentals. The guest house is large, 1,500 sqft 2 story house and is divided into 4 completely separate studio apartments. Each comes with its own private entrance, full kitchen and full bathroom, and sleeps up to 4 people.
Up to Dec 2017, we are claiming relevant income made at the main house and deducting 50% of costs. From Dec 2017, I planned to deduct 80% of costs, based on number of units (guest house is 4 units and main house 1 unit) and number of people (up to 16 in the guest house and 4 in the main house). To make things a bit more separate, I created a new rental property entry in TurboTax for the guest house, thinking I'd phase out the main house entry in FY2018 as there would be no income and no 50/50 costs to split. Only the guest house would remain from FY2018 onward, and costs claimed at 20/80.
Does this make sense, and does it change the process you described above?
Many thanks!
