Author Topic: Depreciate basement rental with TurboTax Premier  (Read 701 times)

mmwannabe

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Depreciate basement rental with TurboTax Premier
« on: March 28, 2018, 02:18:05 PM »
Hi All,
I'm trying to depreciate my basement apartment (worth $140k) with TurboTax Priemer.  I figured the wizard would just ask me the value of my rental property and depreciate for me.  Unfortunately, TT Premier has a terrible wizard for that section.  Can anyone help me with this?  All I get is information on improvements, repairs, supplies, etc.  I'm never asked for the value of my rental.
Thanks!

waltworks

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Re: Depreciate basement rental with TurboTax Premier
« Reply #1 on: March 29, 2018, 10:19:33 AM »
I can't help you (yet) but I'm in the same boat - we finished out a basement apartment (for about half the cost of yours, though) last year. If I find any particular insights when I start my taxes next week, I will let you know. If you figure it out, please post a followup - I'm guessing there are a number of people in the same boat.

I am *positive* that you can and should depreciate construction expenses on a 27.5 year schedule. Perhaps it would be easier to just enter it into Turbotax as a separate property with the same address?

-W

Wile E. Coyote

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Re: Depreciate basement rental with TurboTax Premier
« Reply #2 on: March 29, 2018, 10:57:31 AM »
I haven't used TurboTax in several years, but you should be able to add the portion of the building that is used exclusively for rental as an asset and compute depreciation on it.  The basis should be based on the lesser of your adjusted basis or fair market value of the portion of the building at the time of the conversion.  Make sure you aren't including land value as that is not depreciable, and likely also not exclusively used in the rental.

clutchy

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Re: Depreciate basement rental with TurboTax Premier
« Reply #3 on: April 02, 2018, 08:41:03 AM »
I haven't used TurboTax in several years, but you should be able to add the portion of the building that is used exclusively for rental as an asset and compute depreciation on it.  The basis should be based on the lesser of your adjusted basis or fair market value of the portion of the building at the time of the conversion.  Make sure you aren't including land value as that is not depreciable, and likely also not exclusively used in the rental.

quoted for proper treatment and correct advice. 

You can't just set a value and depreciate it.

clarkfan1979

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Re: Depreciate basement rental with TurboTax Premier
« Reply #4 on: April 14, 2018, 04:15:33 PM »
When I was in grad school, I bought a 4 bedroom house and had 3 roommates. Purchase price was 182K and the lot is worth about 32K. I depreciated 75% of 150K for the 4 years that I lived there within the 27.5 year schedule. Because I don't live there anymore and it's a 100% rental, I now depreciate the full 150K on the 27.5 year schedule.

waltworks

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Re: Depreciate basement rental with TurboTax Premier
« Reply #5 on: April 14, 2018, 07:12:52 PM »
FWIW, I just created a rental asset called "(my address) basement apartment", and entered it's value as the construction costs ($75k in our case). Then depreciated on the usual 27.5 year schedule. I skipped depreciating any appliances or equipment as that was all purchased used and it didn't seem worth the hassle.

Seemed to work? Turbotax didn't have a problem with it, anyway.

-W