Author Topic: Accessory Dwelling Unit and depreciation and tax deductions  (Read 1593 times)

dasripper

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Accessory Dwelling Unit and depreciation and tax deductions
« on: March 20, 2018, 04:18:05 PM »
Hello all, not sure if this should go here or in the "Taxes" sub, so apologies in advance if this is the wrong spot.

We bought a house in Dec of 2016 and ended up renting out the ADU above our detached garage last March.  Now it's tax time and this is my first rodeo. 

The unit is just under 20% of our total square footage of house, so I get that I can write off essentially 20% of mortgage interest/property taxes/utilities ect.  What I am confused about is if I should do the 27.5 years of depreciation, or if I am even eligible.  We are active participants, we don't use a property management company and I so far have been able to do all repairs except for some gutter work.  But we do live in the main house.

I'm also wondering if I can deduct the ENTIRE price I paid for new flooring for the unit instead of just 20%.

I do have a tax preparer recommended by a friend, but right now I'm not entirely trusting her and am asking this while I explore Turbo Tax and other CPA options. 

ca-rn

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Re: Accessory Dwelling Unit and depreciation and tax deductions
« Reply #1 on: March 20, 2018, 06:13:09 PM »
not sure about the answers to your other questions but i do know you can deduct 100% for what is done for the rental unit.

you can deduct the all of the cost if its a repair or depreciate the cost over its useful lifetime if its an improvement.

strictly speaking, if its permanently attached, its usually depreciated over 27.5 years

vinyl floors- i'd depreciate over 5 years (like carpet) or expense as a repair. 

buff and recoat hardwood floors- expense as a repair