Posted by Frank Chin on February 20, 2004 at 12:02:32:
Victor:
According to the info provided, one asset (the rental side) went into service in 98. The other asset, (the owner side) goes into service Jan 03. Each asset will be depreciated in accordance with its “in service date”, and the laws in effect at the time it went into service.
For instance, when I left my own apartment in the 3 family, the rental part went into service in 1983, and was depreciated 15 years ACRS, under the laws in effect in 1983. When the owner part went in service in Jan 1994, it was depreciated over 29.5 years, the law in effect at the time.
When you sell, you have to calculate the basis, and the recapture for each piece separately as well. It’s almost like owning two separate buildings. You must keep good records.
I also did improvements in the owner unit. When the owner unit went into service, we also depreciated the improvements under a separate asset, after making some allowances for personal use. I kept records of all the improvements in anticipation of the move.
Depreciation after moving out of Duplex - Posted by Victor
Posted by Victor on February 19, 2004 at 14:20:25:
We rented out half a duplex and lived in the other half.
Over the last 4 years I’ve used half the buildings value for my cost basis.
Can I change my basis to the entire building value for last year because we rented out both units for all of last year.
We moved out at the end of '02.
Re: Depreciation after moving out of Duplex - Posted by Frank Chin
Posted by Frank Chin on February 19, 2004 at 17:51:12:
Victor:
We did something similar several years ago. We moved from one apartment of a 3 family, and rented out the owner’s unit.
What you do is you continue depreciating the “first rental side” as you did the previous four years. Continue on.
The other side (your side) is treated as a separate building altogether, and you start depreciating that half from the very beginning. The asset is placed in service the month its rented out.
So you’ll be depreciating “two” separate assets. So the assets will be identified as “123 Main St A”, and 123 Main St B".
Re: Depreciation after moving out of Duplex - Posted by Victor
Posted by Victor on February 20, 2004 at 11:10:36:
I start depreciating my half from Jan 03, since it was late '02 when we moved out, correct?
I wouldn’t place my half into service from the beginning, meaning the time I bought the building in '98, correct?
Thanks.