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Investors & landlords
The following is the rule when you convert property from personal use to rental (income-producing) use:
Property changed from personal use.
If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the lesser of the following.
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The fair market value (FMV) of the property on the date of the change in use.
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Your original cost or other basis adjusted as follows.
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Increased by the cost of any permanent improvements or additions and other costs that must be added to basis.
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Decreased by any deductions you claimed for casualty and theft losses and other items that reduced your basis.
See https://www.irs.gov/publications/p946#en_US_2019_publink1000107373
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‎July 31, 2020
11:54 AM
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