Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
alfaro4u
Level 1

How do I handle capital improvements for 2 family home,I live in one unit and rent the other. I claim 50% depreciation but what about new gutters or electric upgrade

I just need to understand if i should capitalize the entire expense or only half.

1 Best answer

Accepted Solutions
IreneS
Intuit Alumni

How do I handle capital improvements for 2 family home,I live in one unit and rent the other. I claim 50% depreciation but what about new gutters or electric upgrade

Think of the building as two separate properties--a rental property and your personal residence. 

You should capitalize 50% of the gutters and electric upgrade since that belongs to the rental property.  You can add them as separate assets in TurboTax to track the depreciation.

The other 50% of the expense is added to the basis of your personal residence to minimize any gain when you go to sell.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
IreneS
Intuit Alumni

How do I handle capital improvements for 2 family home,I live in one unit and rent the other. I claim 50% depreciation but what about new gutters or electric upgrade

Think of the building as two separate properties--a rental property and your personal residence. 

You should capitalize 50% of the gutters and electric upgrade since that belongs to the rental property.  You can add them as separate assets in TurboTax to track the depreciation.

The other 50% of the expense is added to the basis of your personal residence to minimize any gain when you go to sell.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
Privacy Settings
v