Rental Property Depreciation and Business Use Percentage

[DragonVT]

In 2021, I bought a new home and turned my previous home into a rental property.  This is my first time owning rental property, and I am a little confused on how to complete the depreciation section.  The box that is confusing me is the "Percentage of time I used this item for this business in 2021:".  I am confused as to how this calculation works.  The program already asks you what date you started using the property for the business, so is this box asking if it was 100% business use after that date?  The box also seems to auto calculate based on start date, but that seems to reduce my depreciation twice.  For example:

Full Year depreciation, 100% business use: $6,970

Starting June 1st, 100% business use: $3,939

Starting June 1st, 59% (TurboTax's auto-calculated percentage) business use: $2,324

Which of these entries is correct?  The third option seems to be what TurboTax automatically applies, but that seems like it's giving me both a partial value and a partial year.  Can someone clarify how this should be filled out?  Screenshot of boxes in question attached.  Thanks in advance!

[ColeenD3]

Once you convert your property from personal to rental, it is 100% business use. The other option is for people who have vacation homes and live in the home a percentage of a time and rent for certain periods.

[DragonVT]

So, just to make sure I am completely clear, the way I have completed this section in the screenshot is correct?  Start date 6/1/2021 and then 100% business usage, since it is now a full time residential rental under a 12 month lease?

[ColeenD3 · Accepted solution]

Yes, you are correct and so is the screenshot. You did not originally use the property for business, you converted it. Once converted, it is 100% business.

[DragonVT]

Awesome!  Thank you so much for the fast response!

[stellav]

Regarding this topic, what if I sold the rental real estate in 2022?  

Percentage of time I used this item for this business in 2022?

I did own it for 250 days, and had a tenant for 180 days.  It was vacant for 70 days of which I still owned.  

Would I use 68% (250/365)?  or 180/365 = 50%? 

Thank you!

[RobertB4444]

You use the number of days that it is available for rent for that number.  If it was vacant for 70 days because you took it off the market to prepare to sell it then you use 180/365.  If it was available to be rented but nobody wanted to rent it then you use 250/365.  And if it was available for part of that 70 days but not for all of it then you get to create an all new number.

@stellav