Is this OK?
No, It's not okay. You are required by law to depreciate any and all assets used in a rental business (which is what you have here - a rental business). Based on this statement from you:
I am taking depreciation against only one of the properties/addresses.
You are required to depreciate "all" units that are classified as rental property. You don't have a choice on this really.
I am assuming that you have each of the four units entered into the program as individual rental properties. This is perfectly fine, and the way I would probably do it.
The fact is, you have "FOUR" assets, as each unit is it's own physically self-contained living facility with all the amenities needed for each to function independently.
-Each unit has it's own physically separate cooking, bathing, and cleaning facilities.
-I am also assuming each unit has it's utilities metered separately (gas, electric, water, etc.) but it's really not a requirement.
You need to divide your expenses across all four units. Should be easy since you just divide everything by four.
So if you paid $100,000 for the building that contains four units, your cost basis would be $25K for each unit. I'd probably allocate at least $5K per unit to the land. So for each unit cost would be $25K and cost of land would be $5K.
One advantage of splinting things like this, is that if you later dicide to sell one of the units, you most certainly can and the paperwork (tax-wise) will be much easier to deal with on your taxes. Likewise, if you decide to move into one of the units as your primary residence, that too makes the tax paperwork simpler.
