Construction cost for Garage conversion to ADU

[vickster2078]

Hello,

We have converted our garage to ADU and am currently using it for my parents (no rent)

Is it correct that the construction code paid (labor, material, permits, etc.) is not deductible as it would be considered as personal use?

Is it correct that in future, if this were to be rented out, then the construction cost could be depreciated?

Thank you for your help

[ColeenD3 · Accepted solution]

Yes, right now it is a personal expense and will be added to the basement of the home. If you begin to rent, then you will depreciate the property.