How do I increase the basis for purchase of my mother's half of a residential rental?

[rhalexda]

My mother and I each owned 50% of a residential rental. I previously reported my half of income and expenses and depreciated my portion of the basis. Because we remodeled, the property increased substantially in value over the next several years. My mother passed away in 2023. In 2024, I purchased the remaining 50% from her estate, making me 100% owner. How and where do I account for the increase in basis, and depreciation for 2024? (Form 1040, Sch. E)

[DianeW777 · Accepted solution]

Enter a new asset for the portion of the rental you recently bought, then enter your placed in service date of 2024. This will allow the correct depreciation and tax treatment of the two separate pieces of the same property. When you sell, it won't really be that complicated to sell off all of the assets at the same time with the correct depreciation. 

As far as expenses, you will enter your expenses for the entire property from the date you took over. Based on your information that will be starting in 2024.

[rhalexda]

Thank you.