@amyonghwee wrote:
How do I handle the rental property depreciation ?
This house is bought in 2010 and only converted to rental in Aug 2023.
In TT, I selected "Residential rental real estate". Then it asks for "cost", "cost of land" and "date purchased or acquired".
For "date purchased or acquired", do I use the 2010 date or the July 2023 date..
I believe I can use the 2023 property tax bill for the "cost" and "cost of land". Do I need to prorate this since rental starts from Auf 2023?
Your cost basis is the price you paid for the property originally, plus the price you paid to make any permanent improvements. (This covers your HVAC question.) The cost of the land is not reported on your property tax bill, because that reports the current value. But you might use the same percentage. For example, if currently your bill estimates the land is 20% of the total value of your property, then the cost of the land in 2010 might have been 20% of the price you paid in 2021. Date purchased is the date you purchased the property, in 2010.
The purpose of these questions is to determine how much you can deduct for depreciation (wear and tear on the property). Somewhere else you are asked "when did you place the property in service", that is the date the property was available and listed for rental, even if you did not get a tenant right away. The program will pro-rate your depreciation based on that date.
