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.

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1 Best answer

Intuit Alumni

Jun 5, 2019 11:14:25 AM

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.

Intuit Alumni

Jun 5, 2019 11:14:25 AM

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.

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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