Q: "I have a home that I cannot sell, so what value do I use if I convert this to a rental?"

A: When property is converted from personal use to business use,you will need to determine what the fair market value is as of date you make this home available for rent (start advertising). You will also need to calculate what your adjusted basis of the home is as of this conversion date. This means you will include the purchase price and add any improvements over the years the home was your residence (add the cost of decks, new roof, windows, additions, driveways, pool, etc.).  The new basis to start depreciation on your rental will be the lower of these two values and depreciated over 27.5 years. 

The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax accounting services information.

Call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730 as required to set up an appointment.