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Level 2
posted Apr 3, 2025 11:39:29 AM

If I had rented out a room in the previous years, and converted it to a full rental last year, how do I determine the cost basis/depreciation?

I purchased the house in 2021for personal use. In 2022, 2023 we rented out a room to our friend. Our CPA helped claim some depreciation in those years. In 2024, we moved out and converted it to a fully rental house. How do we determine the cost basic and deprecation in the situation? Should I refer to the previous years tax return and sum the deprecation up? Is it still qualified to be a first year rental property?

1 1 1992
1 Replies
Expert Alumni
Apr 4, 2025 5:33:57 AM

You should remove the old asset entry in TurboTax and then add it back in. For the new asset entry, the cost will be the original cost basis of the property less the depreciation deducted in previous years. It would be best to continue with the rental property you have set up in TurboTax, just adjust the house asset entry as I just explained.