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Updated about 4 years ago,
House Hacking taxes code and Depreciation Calculation
Hello BP - Has anyone done depreciation tax credits when House hacking? From what I have gathered on several financial advice websites, in order to calculate depreciation for an owner occupied rental/duplex you follow the below steps:
- Determine the house/building value separate from the land
- Divide this amount by 27.5 and claim the pro-rata(percentage of owner occupied vs rental occupied) amount as the depreciation expense for the year.
- If the rental was not in service for the entire year they provided a prorated percentage for each month - mine was a true rental in Aug 2020 so I use 1.364% of the depreciation amount.
Is anyone a CPA that can confirm this or am I completely off? I have listened to a few podcasts with a CPA and they did note that usually these calculations are a complete mess.