What if I converted my home into a rental property?
Menu Path: Income > Business / Rental Income > Rental Income (Schedule E)
In the Rental Income section, only enter the expenses for your home that were incurred after the date it became a rental property. For example, if the home was converted to a rental property on August 1st, then only enter any expenses such as utility costs or mortgage interest that were paid after August 1st.
You begin depreciating your home on the date it was converted to a rental property.
Cost Basis
The cost basis of your home is usually the original cost of your home plus amounts paid for home improvements over the years that you've owned the home. If the fair market value of the home on the date you convert it to a rental property is less than your original cost plus amounts paid for improvements, you must use the fair market value.
For more information, see IRS Publication 551 : specifically, the section Property Changed to Business or Rental Use.
In the Rental Income section, only enter the expenses for your home that were incurred after the date it became a rental property. For example, if the home was converted to a rental property on August 1st, then only enter any expenses such as utility costs or mortgage interest that were paid after August 1st.
You begin depreciating your home on the date it was converted to a rental property.
Cost Basis
The cost basis of your home is usually the original cost of your home plus amounts paid for home improvements over the years that you've owned the home. If the fair market value of the home on the date you convert it to a rental property is less than your original cost plus amounts paid for improvements, you must use the fair market value.
For more information, see IRS Publication 551 : specifically, the section Property Changed to Business or Rental Use.
