We lived in our house for several years before converting it to a rental property. Since you only depreciate the improvements value and not the land value, I looked up the valuations from the tax assessment. But do I use the assessment from the year we bought the house, or from the year we converted it to a rental property?
You'll need to sign in or create an account to connect with an expert.
Neither. The assessed value is very different than the fair market value (FMV). Assessments can be higher or lower than FMV. The IRS lets you know that you must base the depreciable value of the rental property on what you actually paid for the property or the FMV whichever is lower on the date of conversion.
For your convenience I have included some instruction on how you enter a rental property that was converted to a rental property.
Beginning with the month it became available for rent this would be the first month of actual rental conversion. This does not have to be the first month it was rented, however it does have to be a month where it was decided it would be available to be rented.
There are special steps when a property was converted from personal use to rental use. TurboTax will carry the personal portion of mortgage interest and property taxes to the itemized deductions and the rental portion to the Schedule E.
In TurboTax Home & Business follow these steps and the screenshots attached.
Neither. The assessed value is very different than the fair market value (FMV). Assessments can be higher or lower than FMV. The IRS lets you know that you must base the depreciable value of the rental property on what you actually paid for the property or the FMV whichever is lower on the date of conversion.
For your convenience I have included some instruction on how you enter a rental property that was converted to a rental property.
Beginning with the month it became available for rent this would be the first month of actual rental conversion. This does not have to be the first month it was rented, however it does have to be a month where it was decided it would be available to be rented.
There are special steps when a property was converted from personal use to rental use. TurboTax will carry the personal portion of mortgage interest and property taxes to the itemized deductions and the rental portion to the Schedule E.
In TurboTax Home & Business follow these steps and the screenshots attached.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Raju15
New Member
roger622
New Member
no-name1
Level 3
ryanroy
New Member
wendyle1993
Level 3
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.