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

[alfaro4u]

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

[IreneS · Accepted solution]

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.