Schedule E property type

[ahalverstadt]

I own a single family home that has been split into two units - an upstairs unit and a downstairs unit. Both units are complete dwellings, and they have separate entrances. But, we share a single address (the city considers the property to be a single family home) and all utilities. I live in the upstairs unit and rent out the downstairs unit.

I am trying to determine how to answer the basic question of whether this is a single family or multi family home for Schedule E. I have found previous threads on this exact question but with conflicting responses. Can anyone confidently tell me which it is?

[Anonymous_]

It's up to with respect as to how you want to handle your scenario.

Frankly, TurboTax is not well-suited to entering the information as a whole and then having the program "do the math". In other words, you are better off doing the math (calculations) yourself and then entering those figures into the program.

Treating the house as a single unit, however, would most likely make it difficult to determine the basis of the house at such time that you sell it and/or whether you qualify for the home sale exclusion. 

[ahalverstadt]

@TAG Thank you for the help. I think you're right that it is much cleaner to classify it as multi-unit property.

I have another question about this. When I bought the house, I initially rented out both units. I later converted one of the units to my primary residence. Do I classify the permanent rental as an owner-occupied rental, even though it wasn't at first?