Calculating cost basis on rental AND ADU

Ok here's the situation:

I have a property that has a main house and a carriage house (ADU). I have rented the carriage house since 2018, and I believe that I calculated the cost basis properly to capture depreciation in 2018. I used to live in the main house.

Now I rent BOTH houses.

Do I now calculate cost basis separately?

Is the cost basis for the main house my purchase price minus land?

How do I enter this into turbo tax?

Thanks for any help in advance.

223

Expert Alumni

Feb 12, 2022 10:40:15 AM

Example: If you had a property that had a cost of $500,000 and you have allocated $150,000 to one portion of the property over the years, that leaves you with $350,000.

Basis is the entire amount (which for you is divided by two structures). You must separate land from each structure since you can't depreciate the land.

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Calculating cost basis on rental AND ADU