Assuming that ADU means additional dwelling unit, then you need to keep accurate records of the construction, but you don’t deduct or do anything on your tax return until you place it in service as a rental, that means you list it as available for rent after all repairs, renovations, certificate of occupancy, and everything else is in place and ready to go.
When you place the property in service, you will depreciate it over 27.5 years. That means you deduct a portion of the cost each year over 27 1/2 years, assuming the property remains in service as a rental unit. The basis for depreciation is your cost basis, or the fair market value, which ever is less. Your cost basis is what you actually paid to build the ADU, not including the value of the land. You can include in your cost basis, all necessary costs including construction materials, blueprints, and fees for inspections and utility hook ups. You cannot include anything for the value of your own labor, just amounts that you pay out-of-pocket for materials or fees or contractor labor.
When you place the property in service, you can also deduct expenses such as utilities and hazard insurance. If you pay for lawn mowing, landscaping, property taxes, or other expenses that are shared between the ADU and your personal residence on the same piece of property, you can proportionately allocate them to the rental based on the square footage of the rental and your main home.
