Software: TurboTax Premier
Background:
Year 2019: {S1} is sole owner of rental property & has been taking depreciation deduction for 10yrs.
- cost basis = $100,000 / 27.5yrs = $3,636 per yr
- at end of 2019, NBV = $100,000 - ($3,636 x 10yrs) = $63,640
Year 2020: {S1} has financial issues. Rental Property is re-financed. Now Rental Property ownership is {S1} & {S2} as JOINT TENANTS. For simplicity, let's just say split is 50/50.
Splitting of income & expenses is easy, BUT what happens with depreciation?
Questions:
1) {S1}'s NBV is $63,640. How to move forward if {S1}'s share is 50%. Will depreciation be half of the $3,636?
2) {S2} will have a new asset to depreciate? Is the cost basis at FMV or do we take the existing NBV, amortize over remaining life of asset (27.5-10 = 17.5yrs)?
I have been reading all over. Found things about people marrying & combining. Cases of inheritance, but I can't find anything on this.
Thanks so much for all you help!!!
