There is no bug. If there was, there would be hundreds, if not thousands of posts on this issue.
So in December 2020 and January 2021, we made all kinds of improvements - windows, countertops, refrigerators, dishwashers, cooktop, etc. So I put all of these down, along with the house itself, and I chose the option to spread out the deductions over several years.
So there is no way this house was move-in ready and "in service" before the end of Jan 2021. Your date of conversion or in service date would be one day after all that work was done. Say for example, Jan 20, 2021. So your days of personal use would be zero, and days rented day count starts on the first day a renter "could" have moved in.
I did stay in the house for personal reasons for a good part of January. Just to lay things out, I stayed in the house for personal reasons with my family in January (while renovation was going on).
That indicates you were there for the primary purpose of preparing the house for rent for the very first time.It does not indicate to me any type of personal use.
House was empty available for rent (or sale), no takers, starting Feb 1 until it was rented out August 1.
So it was place "in service" on Feb 1 and sat empty while you advertised, until you actually got a renter in there on Aug 1.
What you need to do, is indicate the property was rented "the whole year". You will not be asked for personal use or days rented then. The program will figure depreciation using SL/MM from your in service date of Feb 1.
Additionally, to make life easier on the tax front, the renovations/property improvements you did before Feb 1 do not need to be entered as separate assets so long as they fall under the same MACRS classification as the property itself does. You simply add those costs to the cost basis of the structure, since everything was placed in service and available for rent on Feb 1.
Windows and countertops can be added to the cost basis of the structure. the appliances can be also. But they should be separated out and classified as appliances under MACRS since those are depreciated over 5 years.
Also be aware that with appliances, if they are line itemized on the invoice and cost less than $2,500, you can just expense those under Safe Harbor de Minimis and be done with them forever. Sure beats having to track/account for depreciation later down the road.
