How do I calculate building depreciation for condo if I used it as primary residence first?

[gdgraph]

Here's my situation. I bought a condo in 2017, used it as my primary residence, now in 2021 I want to rent it out. I'm not establishing it as an LLC. I understand how you calculate the depreciation (multiply the building value by 3.636% for that year based on the 27.5 years you can write off depreciation) but I don't know what values to use for my building value.

Do I use the building value from 2017 when I bought it (sales price or assessed price) or do I use the new building value from 2021 (from my tax assessment, which shows a higher value than what I paid in 2017) since that's when I started renting it out? When I had the place assessed in 2017 they never broke out the building vs land so I was planning to just use the ratio off of my tax assessment.

[AnnetteB6]

When you are working on your 2021 tax return, TurboTax will ask for information about your property.  You will indicate that you are converting your property from personal to business use.  That will trigger questions about your original purchase price as well as the fair market value when the property was converted to business use.  Based on the values entered, the proper basis will be used for your depreciation calculation. 

So, you will need both sets of data with regard to your property -- your original basis plus adjustments and the fair market value on the date of conversion.  Your tax assessment data is a reasonable source to use for this information.

In general, the basis for depreciation will be the lesser amount of your adjusted basis in the property versus the fair market value when the property was converted to business use.