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J
jdogonowski
Level 1
June 1, 2019
Question

Residential Real Estate Rental Asset

  • June 1, 2019
  • 1 reply
  • 17 views
Does the cost of a real estate rental asset go back to the original date of purchase or value at time converted to rental asset? I have been living in the house for 8 years but just started renting it this year so these values have changed significantly.

1 reply

MichaelL1
MichaelL1
Level 15
June 1, 2019

To compute the deprecation deduction, TurboTax will ask for cost of the home and fair market value of the home when placed in service as a Rental. The depreciation is computed on the lower of the two values.  This is in accordance to the IRS Code. 

Cost is what you paid for the house, plus significant improvements you made over the last 8 years. Such as new roof, furnace windows, etc. 

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