I own a commercial property (under Property SMLLC) for the last 17 years where I am also self-employed under my Clinic SMLLC. I have been reporting depreciation of the entire building during this time under Schedule C (Clinic SMLLC). Last year I started renting out two units of this property. One unit was rented as a long-term residence and the other as a commercial space. Both units make payments to Property SMLLC. I am curious about how to report depreciation of these newly rented units. I do not see an option in turbotax online that allows me to combine these units under one roof so I am assuming that:
1. I would need to report information about these units under separate property headings in the "Rent and Royalties" section and
2. I would have to proportion the cost of the building by dividing total sq footage by the sq footage of each of the three units to avoid reporting 3x (2 units + clinic) depreciation.
Idea 1: Keep things simple and just report entire (non-proportioned) building depreciation amount for each unit under different property headings. And when it comes to selling the property in the future, just list sale price of the two rental units as $0 and report the full sale price for my self-employed portion to avoid 3x depreciation recapture.
Idea 2: Leave the purchase price of the building under each separate unit heading (for the 2 newly rented units) as $0 (hence $0 depreciation reported) and just continue to depreciate full amount as I've been doing with my self-employment business portion.
Idea 3: Adding my Clinic LLC to the mix and paying rent to Property LLC. Then combine all three units into one rental under my Property LLC with one depreciation schedule (Not sure if this is possible with Turbotax Online especially considering difference between depreciation schedule of commercial vs residential rental and the fact that my Clinic LLC portion would a"Self-Rental')
I'd appreciate (not depreciate - haha) any advice on how to report my situation using Turbotax Online.
