Thank you for your quick response. At this point in time, we are trying to decide whether to change the rental units to personal use for a year, maybe two, and then rent them again. The reasoning is Covid. The rentals are in one building in which we live, and we are both at high risk if we should catch Covid, so our thought is to not rent until Covid is better. We cannot risk our lives if some renter winds up infecting us. And the rental moratorium on evictions doesn't help small Mom and Pop operations, although it may be ending, who knows if it will be reinstated. We can't afford to pay the mortgage and renters utilities if they don't pay... so it is kind of a big question for us. We could definitely do some repairs during the "downtime".... just trying to calculate what would be the best route for us to take both financially and health-wise.
You mentioned the following: "There's a lot of manual math involved, as the cost basis of the base property will be reduced by the amount of prior depreciation already taken, and the 27.5-year depreciation cycle starts over from year one. Additionally, any property improvements done during the "downtime" add to the cost basis." I am not sure I fully understand this, if we turn this into personal property, and later reinstate it for rentals, you mention the depreciation cycle starts over from year one. So does that mean we would have another 27.5 years to depreciate the building even if the cost basis is reduced?
Thank you so much for your assistance.
