Solved: We turned primary residence (purch Dec 89) into rental Sept 17. Owned in full for years, can I skip details about points paid/remodeling that occurred over last30 years?
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We turned primary residence (purch Dec 89) into rental Sept 17. Owned in full for years, can I skip details about points paid/remodeling that occurred over last30 years?

we've done huge remodeling efforts over the last 30 years, and I have no way to verify points/closing costs back to 1989. Is there a way to only enter/record the rental fees as income and subtract expenses related to the Rental, and not get into too much details on why our house appreciated over 30 years in seattle?
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New Member

We turned primary residence (purch Dec 89) into rental Sept 17. Owned in full for years, can I skip details about points paid/remodeling that occurred over last30 years?

Yes, you can skip all those entries and figure out the basis on a sheet of paper and enter the total, provided your basis is lower than the fair market value. Please see the IRS information below.

Per Publication 527 - IRS.gov Chapter 4, pages 15-16  Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of fair market value or adjusted basis on the date of conversion. 

Fair market value. This is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Sales of similar property, on or about the same date, may be helpful in figuring the fair market value of the property.

Figuring the basis. The basis for depreciation is the lesser of: 

  • The fair market value of the property on the date you changed it to rental use; or 
  • Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. 
  • For other increases and decreases to basis, see Adjusted Basis in chapter 2. 
  • Example. You originally built a house for $140,000 on a lot that cost you $14,000, which you used as your home for many years. Before changing the property to rental use this year, you added $28,000 of permanent improvements to the house and claimed a $3,500 casualty loss deduction for damage to the house. Part of the improvements qualified for a $500 residential energy credit, which you claimed on a prior year tax return. Because land isn’t depreciable, you can only include the cost of the house when figuring the basis for depreciation. The adjusted basis of the house at the time of the change in its use was $164,000 ($140,000 + $28,000 ? $3,500 ? $500). On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house. The basis for depreciation on the house is the fair market value on the date of the change ($147,000) because it is less than your adjusted basis ($164,000).

Related information: 

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New Member

We turned primary residence (purch Dec 89) into rental Sept 17. Owned in full for years, can I skip details about points paid/remodeling that occurred over last30 years?

Yes, you can skip all those entries and figure out the basis on a sheet of paper and enter the total, provided your basis is lower than the fair market value. Please see the IRS information below.

Per Publication 527 - IRS.gov Chapter 4, pages 15-16  Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of fair market value or adjusted basis on the date of conversion. 

Fair market value. This is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. Sales of similar property, on or about the same date, may be helpful in figuring the fair market value of the property.

Figuring the basis. The basis for depreciation is the lesser of: 

  • The fair market value of the property on the date you changed it to rental use; or 
  • Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. 
  • For other increases and decreases to basis, see Adjusted Basis in chapter 2. 
  • Example. You originally built a house for $140,000 on a lot that cost you $14,000, which you used as your home for many years. Before changing the property to rental use this year, you added $28,000 of permanent improvements to the house and claimed a $3,500 casualty loss deduction for damage to the house. Part of the improvements qualified for a $500 residential energy credit, which you claimed on a prior year tax return. Because land isn’t depreciable, you can only include the cost of the house when figuring the basis for depreciation. The adjusted basis of the house at the time of the change in its use was $164,000 ($140,000 + $28,000 ? $3,500 ? $500). On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house. The basis for depreciation on the house is the fair market value on the date of the change ($147,000) because it is less than your adjusted basis ($164,000).

Related information: 

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