Below are the answers to your basis questions:
- Just to clarify, the cost basis of the room would be the percentage of the room (e.g. 25%) of the total cost basis. The percentage would be room square feet divided by entire house square feet. The result is used to multiply it by the actual cost, net of land or the fair market value (FMV) on the date you began to rent it whichever is less (on that day).
- The basis of the whole house in the "2nd" rental would be the actual cost basis minus the depreciation received from the room rental. If the total cost is less than FMV the answer is yes. Remember your cost basis is the lesser of actual cost or FMV.
- What should I answer to the question about the property was rented all year or not. If this is for the period the whole house was rented (6/1-12/31) you will answer yes. TurboTax will ask you when you began renting this house and you will enter 6/1/2023 which will allow TurboTax to calculate the appropriate depreciation. You should use the correct percentage of any expenses such as utilities, insurance, real estate taxes that belong to the rental for the last 7 months. Any expense that is totally for the rental period should be used 100% as an expense.
@ant2024
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