main residence transfer to rental property

[Cici Zhn]

I transfer my main residence to rental property in 2023. Usually the rental property has depreciation on the house value. However, when I was working on adding the previous main residence to rental property, I found the depreciation value is much lower than expected. Then after double check, I found the depreciation value only covered certain improvement asset value part, but no property value part. Why and how can I depreciate the whole property value in the next 27.5 year?

[ThomasM125]

You would enter the lower of the cost basis of the house or its fair market value on the date available for rent into TurboTax to start taking depreciation on the rental house. 

When you enter into the business section of TurboTax, choose the Rental and Royalties option on the screen that says Let's gather your business info:

 

Work through the rental section until you come to a page entitled Review your (name of rental) Rental Summary and choose the Assets/Depreciation option

Work through that section and choose Rental Real Estate Property on the screen that says Describe This Asset

Then, choose Residential Rental Real Estate on the next page and on the next page after that you will see where you can enter the cost (or fair market value if less) of the property and date the asset was put into rental service.

[Cici Zhn]

Thank you. I did all those but still I did not see the property whole value was depreciated. I wonder if that was because this is the first year I converted main residence to rental.

[Cynthiad66]

Yes, if this is the first year claiming rental, then you would not have claimed it on prior year returns.

@Cici Zhn