@hno4 wrote:
Got it thanks, to clarify, if I rent for 4 months, then personal usage for 1 year and rent for another 4 months, the depreciation will restart to accumulate for my 2nd rental, as it should not include my personal use between 2 rentals? let me know if I understand correctly.
Yes.
However, can I ask why it is being rented for 4 months on-and-off? The point I'm getting at is "Nonqualified Use" when you sell. Generally, when you use the home for your Principal Residence AFTER it is not your Principal Residence (such as renting it out), that triggers "Nonqualified Use" (although there are exceptions, which is why I asked why are you renting it out).
The problem with Nonqualified Use is that your $250,000/$500,000 Principal Residence exclusion is prorated when you sell. A severely simplified version is let's say you own the house for exactly 10 years and it was rented exactly 1 years (and you used the home as your Principal Residence AFTER it was rented). In that example, 1/10th (10%) of the profit would not qualify for the tax-free exclusion (in addition to the tax from the gain due to depreciation).
