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Depreciation Basis for Rental Property Multiple Owners

I am considering selling a 50% interest in my primary residence to an investor and converting it to a rental property. In this case, my original purchase price of the home and the investor’s purchase price of their share of the home would be different from each other. Would my depreciation basis be 50% of the original purchase price and my investor’s depreciation basis be 100% of the cost of their purchase price of the 50% share of the house?


thank you in advance!

2 Replies
Level 15

Depreciation Basis for Rental Property Multiple Owners

see a lawyer for advice.  titling of the property will need to be modified and you may need new title insurance.  if you have a mortgage you may be required to refinance it.  real estate taxes could be affected. in some jurisdictions, a primary residence is taxed at a lower rate than a rental property.  you will be creating a partnership so you will have to file for an EIN and file annual partnership returns. however, as far as depreciation goes, you're probably correct.   

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Level 15

Depreciation Basis for Rental Property Multiple Owners

Can you even convert it without the other 50% owner's approval?

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