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athos_15
New Member

Converting other half of Multi-Family Rental

I have a 2 family home that I purchased in 2011.  I lived in 1 unit and rented the other till 2018.  So when I filed my taxes back then I listed half the home as a rental with half the cost as the asset.  During that time I filed my schedule E with all expenses divided by lets say 50% since half of the building rented.  However in 2019 I moved out and started renting the unit I vacated.  It is no longer my residence but now 100% of the home is rented.  How do I report this?  Do I need to create a separate property? Or is there some way of changing the existing Schedule E?  Not sure what changing the existing Schedule E is going to do to depreciation since only half of the cost of the house was listed.  Any guidance would be appreciated.

3 Replies
MinhT1
Expert Alumni

Converting other half of Multi-Family Rental

You need to create another asset in TurboTax (which is the second half of your home) which is placed in service in 2019. You are considered as having 2 rental properties.

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athos_15
New Member

Converting other half of Multi-Family Rental

Thanks!  Just a follow up, so when I create the new asset, do I use my original cost basis?  Or do I use what the asset is worth now?  I assume this also means that I have to continue to split expenses. For instance, enter half of insurance costs/taxes against one asset, and the other half against the new asset, correct?

AnnetteB6
Expert Alumni

Converting other half of Multi-Family Rental

You will actually enter both your original cost of the property (but use only half since you are adding the second half of the property as a new property) and the fair market value for half of the property at the time it was converted to be a rental property.  Then TurboTax will determine which value to use as the basis for depreciation.  

 

Yes, you will continue to divide certain expenses between the two rental properties, such as your taxes and insurance which would be billed based on the whole building.  

 

 

@athos_15

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