Hello,
I have a standard 3br house that I've rented out for 7+ years. I just recently had a detached an ADU built on the same property (most of labor came from myself), which was put into service 3/1/2022. Both the house and ADU are/have been rented out. Have separate addresses, and utility hookups. And I have no mortgage on either of them.
One question is, would I enter the ADU as its own property under "Rental and Royalty Summary" or would I add it under the original house's property under "Your Property Assets" as a "major improvement?" (see pics).
Also, would the rental income that I made from the new ADU just be combined with the original house's rental income, if I did add it as a major improvement?
Lastly, I understand if I depreciate the total cost basis as a major improvement, would I be able to do individual appliances as well on top of the total?
Hope this makes sense, entering uncharted territory. 🙂
Thank you!
