The apartment portion would be a residential rental property and the cost basis would be based on the square feet of the apartment. You would divide the apartment square feet by the total square feet of the building. The result would be multiplied by the cost basis of the building only (not the land portion). The result would be your depreciable basis for the apartment and must be depreciated over 27.5 years. By selecting Residential Rental Property TurboTax will know the correct recovery period to use. Appliances would have a 5 year recovery period when and if you purchase those.
You can arrive at the cost of the land by using the tax assessments from the county or city if you do not have a separate land value.
As far as the rest of the building, if it is commercial use, then the recovery period would be 39 years as explained by our Tax Expert @Vanessa A. If it is personal use, then no deduction would be allowed for that.
Be sure to include all the allowable expenses from your settlement statement with your cost of the building before your calculations.
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