AmyC
Expert Alumni

Investors & landlords

 Publication 527 (2024), Residential Rental Property states: You can begin to depreciate rental property when it is ready and available for rent.

The property you had available to rent exclusively, is the bedroom.   So, your depreciation is based on the space available to rent -usually a bedroom, maybe a bathroom - a private area. You would not rent out the living room. Depreciation can be a two edged sword. If you plan on selling this place in a few years, less is better in my opinion since it is reducing your basis.

 

While expenses aren't so important to you, costs can vary by room size or can be a fixed amount, like trash removal. One of the IRS seminars I attended, a statement was made about choosing a reasonable method based on all the variables and maintaining that method throughout. Whatever you feel makes sense based on all of your variables that you would be comfortable sitting down to explain, is a good method for you. Make a record of how you determined 50% of the trash and 30% of something else and so on until you get a good total % number that will continue to make sense for expenses.

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