I'm still a bit unclear about how to deal with the depreciation situation when changing from renting a part to all of a property. It's my understanding that during the period I rented out just F% of my residence, then each year's depreciation deduction would be computed using that year's straight line depreciation based on F% of the full property's basis. Then, after Y years say, I start renting out the entire property what happens? Would I just switch to using straight line depreciation on the full property's basis for the remaining years of useful life? Has the full property's basis been depreciated during the period that I was only renting out F% of it. Instead maybe I could then take the unused portion of the depreciation in those Y years as an additional "catch up" amount in year (Y+1). What's not clear to me here is that while I was only renting a fraction of the property, and only taking a fraction the total depreciation, was the whole property still being depreciated each year anyway? If that's the case then just renting out a room, say, seems like a really unsound financial proposition! Is there another approach to handling the change in year Y+1?
Perhaps I'm overthinking this? Maybe the simple (obvious?) solution is at year Y+1 continue the SL depreciation on %F of the original basis ,and then start a 2nd SL depreciation for the remaining (100-F)% of the basis (as though this were an "improvement"). The net effect each year after Y+1 is a deduction that amounts to the simple SL depreciation for one year on the total basis, but the two components would just have different useful life spans
