MinhT1
Expert Alumni

Investors & landlords

As this is the first time you rented out one of your rooms, the date placed in service is the date you started renting out.

 

You can add all the improvements you made since you bought the home to the purchase price to have the cost basis of your home (excluding land).

 

As you are only renting one room, you have to calculate the rental percentage (for example by dividing the rented area by the total area of your home). Then multiply the cost basis of your home by the rental percentage to arrive at the cost basis of the rented area, which is used for depreciation.

 

Also read this IRS publication, paragraph on Renting Part of Property on page 25.

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