Room rental in personal residence depreciation

[DianeW777]

If you are entering the entire cost of the home as indicated in my last answer, then you enter the total cost of the land in the field requested.  The depreciation will be calculated on the office square feet percentage as indicated.

Yes, any improvements to the office itself will be 100% business use.

@LuLuna 

[LuLuna]

I thought we had concluded that because I have two different percentages, one for percentage of home, and one for percentage of days, that I should enter the asset costs already reduced by percentage of home so that TurboTax could do the percentage of days/business use calculation. It can't seem to do both. 

I could add the full land value to the reduced assets at 100% and then minus it back out.

thanks again!!!

[DianeW777]

Yes, you are correct. Entering the business use percentage is a way that TurboTax can calculate depreciation based on days so that you don't have to do all manual calculations.  It may be best just to keep the land out of the tax picture until you sell, if that happens in the future. Use it only in your calculations.

@LuLuna 

[Carl]

@LuLuna once you have completed the SCH E, confirm that the depreciation is correct. I am fully expecting it to be wrong, and by a lot. To confirm things, see IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf

Use the MACRS worksheet on page 36. For line 6 of that worksheet, use table A-6 on page 71. If (when) it's wrong, let me know and I'll show you the simplest way to make it right and still be able to e-file.

[LuLuna]

Thanks...

Back to confirming that I need to reduce the cost of asset by the use of home (square footage) before entering it. Then let TT track the business use percentage calculations. 

[LuLuna]

 It may be best just to keep the land out of the tax picture until you sell, if that happens in the future. Use it only in your calculations.
Should I leave out all land improvements as well?  Fence, driveway, patio?

[Vanessa A]

Yes.  If you are renting out rooms and you are leaving the land out of the tax picture, you would also leave out land improvements such as the fence, patio, and driveway.