1. Is building an ADU considered a Land Improvement, or Residential Rental Real Estate?
Technically, speaking, neither. It's considered a property improvement. If you rented it out in 2020, then it's classified (not "considered") as Residential Rental Real estate and depreciated over the next 27.5 years.
2. All of the different disciplines that it took to build the Unit, would each part be depreciated separately, or together?
What it cost you from the time you decided "I want to build an ADU" until the date the date the property was move-in ready, is your cost-basis. The total of "EVERYTHING" from design, permitting, clearing the land, pouring the concrete, buying/installing the appliances, the labor you paid, to the cost of the last roofing nail holding down the last shingle. So if materials cost you $10,000 and you paid someone $50,000 to build it, your cost basis in the structure is $60,000.
That's your cost in the structure "ONLY". So if you're renting it out you'll have to allocate some land for the renter to use also. That is, unless they're expected to enter/exit the property without stepping one toe on your property. 🙂
