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Updated almost 3 years ago,
Depreciation of a house rented once for several months
I bought a house 5 years ago.
Did a lot of DIY home remodeling for 3+years.
Finally I rented it for 5 months last year.
Preparing tax return using FreeTaxUSA.
1. Should I put things like a new Rug, broken table and broken vacuum cleaner by tenant into depreciation ? Or into Miscellaneous rental expenses?
2. I'm hesitant to add depreciation to house itself. I rented the house for less than 10% of time during the last 5 years. The rest of the time I live in the house. After deducting the cost of the land and given that I used it for business renting less than 10% of time it amount of tax discount is very small. But Prior Year depreciation recommended by software and future depreciated cost of the house will surely be counted against me when the house will be sold.
Should I use depreciation at all? Or maybe if I do not depreciate the house basis cost will be 100% of what I paid for the house?
3. For all the DIY work I did I only paid for material. Should I consider my own work "free" ? Or should I increase cost basis including something that I can add to compensate to time?