oldjgw
New Member

Changing a basement space in my home to a rental unit.

Changing a basement space in my home to a rental unit.  I did major constuction, about $55,000 to convert an unfinished basement into a rental apartment.  In addition I about $600 in expenses, utilities, advertising etc.  I can not figure out how to enter this into TT.  I do not wish to depreciate house just the asset improvement and would like to do that over 5 years if I can.  I just can't figure out what boxes to check.

Coleen3
Intuit Alumni

Investors & landlords

Your type of rental is a multi-unit rental. Since it is not a stand-alone structure but part of your home, you will have to prorate the improvement. The rental portion (whatever that percentage would be) is depreciated over 27.5 years. The personal portion of the improvement will be added to the basis of your home and will help exclude gain when sold.

The direct expenses related to the rental activity is fully deductible.

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