It depends. The correct amount is the amount you used originally for the home and land. Currently, if you had any capital improvements during the primary residence period you would add a separate asset. Enter the current date in 2024 for the date placed in service.
- Cost Basis: Property converted from personal use is rental use must use the lesser of:
- Actual cost
- Fair Market Value (FMV) on the date of conversion
- Real estate rarely decreases but rather increases in value over time so cost is used for depreciation
- Enter the full cost and then only the land when asked. TurboTax will reduce the depreciable basis by the land when doing the calculations. The tax assessment will provide the ability to determine land and building cost basis (take the land assessment divided by the total assessment to arrive at the percentage of cost that applies to land.
In TurboTax, search for rentals and select the Jump to link at the top of the search results.
- Follow the on-screen instructions as you proceed through the rental and royalties section.
- On the Rental Summary screen, which is where you enter your rental income and expenses, Add expense or asset
- When you enter your rental house as an asset be sure to select Residential Rental Property, then follow the screen prompts to enter all the details
Note: You must manually track all depreciation used in the past and from 2024 forward. It will be important when and if you sell it in the future. Keep your past and present tax returns for proof of actual depreciation used.
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