For a remodeled accessory dwelling unit (shed) used as a short term rental on our property:
*The unit is only used for short term rental.
*Remodeling Costs- Do we only enter the costs for permits, electrical, walls, flooring, plumbing, and building supplies to get the rental as livable space? We initially entered all of the expenses here, but shows it will depreciate the costs over 27.5 years.
*Instead, should we put the expenses for the furniture and supplies (beds, linens, t.v., etc) in the 'Expenses' section?
*Property Tax Values- The dwelling is 192 sq ft, but do we enter the full assessed land value from our property taxes, or only a percentage of the land value based on the size of the shed?
*Improved Value (buildings, structures, fences, decks)- What does 'improved value' mean, and what do we enter here?
*Can we deduct a portion of our property taxes, utilities, insurance, etc. for the detached dwelling (we have a home office in our main home for a separate business, and deduct a portion of utilities, property taxes, insurance based on the size of the room used).
Thank you for helping us navigate our first year with these start-up deductions, and how it works.
