Rental

nealspencerwilliams — Thu, 11 Feb 2021 02:58:34 GMT

I bought a duplex and live in the basement and am renting upstairs. Can I deduct depreciation on the part I am renting out? What happens when I sale it if I don't depreciate it? Also if I do take depreciation what does it do to my capital gain from the sale?

Also I made a lot of repairs to the house. Can I only deduct the repairs on the portion that I am renting out?

Re: Rental

JoannaB2 — Thu, 11 Feb 2021 03:32:33 GMT

Yes, You may deduct the depreciation on the part of the duplex that was rented. The cost of repairs (ordinary and reasonable) such as repainting, fixing floors, replacing broken windows maybe fully-deductible (rented portion) in the year incurred. When you sell it, you must recapture the depreciation. Depreciation Recapture is assessed when the sale price of an asset exceeds the adjusted cost basis (original cost reduced by depreciation and increased by capital expenditures or improvements).

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Rental

Re: Rental