Yes that makes sense .
I also made capital improvements like renovation, roof, brick tucking, external stairs. I believe I can add those expense to the cost basis. How do I apply those across the 2 units when one is treated as business and the other treated as primary.
Also Unit 1 and 2 are not equal, the Unit 2 (primary residence is bigger and has a garage) so the value is closer to 70/30 than 50/50. However, in the past when I did depreciation I had assumed 50%. Does that mean I have to stick with 50/50 split in calculating how I would split the sales and cost of the building?
