Updated about 4 years ago on . Most recent reply
Converting primary to a rental
Hello BP Fam!
Hoping someone can provide some guidance. Full disclosure, I've already emailed my CPA as well.
We own one rental (SFH) in a sole proprietorship currently. We are now under contract for a home that needs relatively minor rehab work (although its in better shape than our existing primary; I've found its very difficult to rehab a home while you live there with young kids.)
The plan is to rehab the "new to us" home, move, and then rehab our existing home (purchased in 2014) for use as another rental. I believe this falls into the "accidental landlord" category in that we had no intention of renting our primary when we purchased it 7 years ago and, thus, we did not keep copies of receipts over the years.
Given that we've gained a sizeable amount of equity (between purchase price and paydown), how do we handle the basis for depreciation? My thought is that we try to avoid spending any money on rehabbing the existing property until we're settled in, but with supply chain delays that can really slow things down for us.
Any practical advice or - maybe point me to a blog / article that I haven't been able to find yet?