Conversion to Short Term Rental

[peteZ88]

I have a second home that I converted to a short term rental in 2024.  For furniture, mattresses, and other contents such as appliances purchased in 2023, can I depreciate based on their FMV at the time it is placed into service. 

Example:  A sofa is purchased for$2000 for a house in July 2023.  In January 2024 the property is converted to full time rental use and the sofa is provided as one of the furnishings.  I determine the FMV of the sofa in January 2024 (date placed in service) is $1500.  On my 2024 Schedule E  for this propery, can I do a 5-7 year depreciation of the sofa’s $1500 FMV or choose to take a Section 179 deduction.

[RobertB4444]

Yes, FMV is exactly how you should determine the value to depreciate.  Just maintain the records for how you came to that value in case there are ever any questions.

@peteZ88