@Tehaleonie wrote:
Thank you! But, is it still possible even though I bought the hot tub in December of 2023 and didn't start renting the place out until midway through 2024?
What you want to do is break out a complete list of assets that are rented along with the house (any property that has an expected life of more than one year). One asset is the house, of course. Its basis for depreciation is your original cost, or the fair market value, whichever is less, minus the value of the land. The house depreciates over 27.5 years.
Other assets might be the stove, refrigerator, washer, dryer, hot tub, or larger furniture items. Each item can be listed separately as an asset to be depreciated. The basis for depreciation is your cost, or the fair market value on the day it was place into service as a rental, whichever is less. (The value of a used washer, used dryer, 6 month old hot tub, etc.). Those property items will depreciate over 7 or 10 years, in most cases, depending on what the item is. (For various reasons, the benefit of listing items with a new price under $2500 may not be worth the extra paperwork.)
Now, for short term rentals, does that mean you will be living in the home for personal use more than 14 days per year? If this is something like an Air BNB, where the property is always listed as an active rental but not always occupied, that;s fine in general, but if you live in the home as your personal residence more than 14 days of the year, the rental calculations get more complicated.
