@pkand @Opus 17 thank you both for your time, I have a follow up questions, I don't want to start a new topic and I know you'd know the answers:
I need some help regarding depreciation of my rental property, cost basis and the recapture tax.
As you know I own a foreign real estate property - 100% in a two family house. It wasn’t legally divided between the co owners, so that’s why I’m saying 50%. In Europe some properties can be owned like that, for example ¼ in a two family house, 1/32 in a 10 family house, etc.
I purchased 50% (one apartment and 50% of the land) in November 2021 and I inherited another 50% after my mother passed away in January 2022.
I started renting both apartments, one in January 2022 (my mother’s) and second one (which I purchased in November) in March 2022.
My questions are:
- How do I calculate cost of basis, do I have to calculate them separately (2 apartments) or as a whole (I own 100%)?
- Can I add lawyer’s fee, court fees, taxes and other expenses, which occurred during transactions and I paid, to the cost of basis?
- Can one property I inherited be valued higher than one I purchased, even if it’s a part of the same real estate? The inherited apartment was in better shape.
- Can I depreciate both properties (even inherited) or the only one I purchased?
- Can I choose not to depreciate inherited property and would you discourage that?
- What happens if I stopped renting my property for a few months or longer, can I still depreciate and deduct this as an expense during tax year?
- What happens to depreciation when I stop renting either of my properties and there will be no rental income?
- If I understand correctly I’d have to depreciate them for 30 years.
Thank you again,
ParkNYC
