How do I enter an owner-occupied duplex in TT? I bought the building in 2018 and live in one unit while renting out the other. So I need to set it up in TT such that the rental unit and my unit are defined correctly with the appropriate depreciation going to the rental.
When you set up a new rental property, you enter the purchase price, escrow fees etc. that was paid for the entire building (rental+owner unit). How do you adjust those amounts so that the correct depreciation amount is applied to rental and self-occupied units?
Some guidance will be much appreciated.
Thanks,
It's easy. You will enter your information in the Rental Section. You will encounter the screen in the screen shot below. Check that you rent out a multi unit property. Next indicate that it is a duplex. Your expenses will be adjusted.
Thank you Coleen. In the screen that you sent, I checked the multifamily (duplex) box and then had to enter the purchase price, escrow fees etc. for the entire building and TT calculated a depreciation amount for the entire building, not for the rental unit. (based on the sq. footage, expenses have be split 40/60 between rental and mine). So I am a bit confused as this depreciation is not applicable to the rental. Thank you.
It should be. What month did you place the property in service? What is the cost? I will do it manually.
Purchased on June 1st, 2018. Available for rent on August 1st, 2018. Purchase price 735K. The cost should be 40/60 based on square footage, i.e. rental unit is 40%, my own unit is 60%. Thank you!
Sorry, is this the depreciation amount for the first year? Now TT shows a depreciation amount of $7058, which is for the entire building.
Are all your other expenses divided propery? If we can wait until tomorrow, I can connect with you in the late am and get a diagnostic copy and look over your return. It's the end of the day for me.
I have yet to enter the expenses. Do I need to enter the mortgage interest and RE tax expense also with a 40/60 split (i.e. if I paid 10K in mortgage interest, do I have to enter it separately as 4000 for the rental and 6000 for self occupied unit? Or do I enter 10K and TT splits it automatically 60/40? I would greatly appreciate it if you can follow up with me. Thank you.
Well, I would have said let TT do the division, but now... I am curious what happens if you enter the whole amount. I am entering in my practice return. Unfortunately, when I do it, everything always works as it should.
I have played around with the program. What I came up with is saying that you will do the calculations and just enter 40% of the cost.
Where do I enter the cost of improvements like a new wood floor in a rental unit?
Since it is new property and you hadn't depreciated it prior to the addition, add it to the basis.
Thank you Colleen. Should I also add the closing costs to the basis, i.e. 735 purchase price + remodeling + closing costs = basis?