Converting Primary Residence to Rental Property


R

Reno Master

What sorts of things are business deductions or
depreciations and what are not? For example, since it's
necessary to move in order to convert use, is the cost of
moving a business deduction? How about the costs of
improving the property? TIA for all replies.
 
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B

Bill

(e-mail address removed) (Reno=A0Master) posted:
What sorts of things are business deductions
or depreciations and what are not? For
example, since it's necessary to move in order
to convert use, is the cost of moving a
business deduction? How about the costs of
improving the property?
At the very least, you should obtain Publication 527 -
Residential Rental Property - and review the principal
chapters. You'll find a specific section on "Property
changed to Rental Use" -- which should answer most of your
questions on that issue.

The answer to your specific query about deducting your cost
of moving, is "No." As to costs of improving the property
-- particularly, modifications to make it suitable for
occupancy by any tenant -- these would mostly be capitalized
into your cost basis for depreciation.

One final word of advice: You would benefit greatly from
obtaining professional tax advice -- especially for the year
in which you make the conversion. Even though you may
proceed to prepare your own taxes in future years, you will
gain valuable insight into the process and guidance on forms
required.

Bill
 
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D

Dick Weaver

Reno said:
What sorts of things are business deductions or
depreciations and what are not? For example, since it's
necessary to move in order to convert use, is the cost of
moving a business deduction? How about the costs of
improving the property? TIA for all replies.
I remember reading, years ago (and everything has changed,
I'm sure) that converting a primary residence to rental
was a bad idea - that you were better off selling it and
buying a property to rent. That memory, although
unsubstantiated by any facts, would still prompt me
to get professional advice today before embarking on such
a venture. Advice not only on the doing of it, but if
alternatives, such as sell and buy another, had significant
benefits.

dick w
 

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