ADU Tax help

6 Replies

I Own and live in a SFR with an ADU(auxiliary dwelling unit) in portland or.

the Adu I rent out and have been using a 70/30 breakdown for the valuation of the property for depreciation & tax purposes( based on sq ft.)

this year I replaced the siding on the main house and Adu and painted as well (paid a contractor). 

My question is for the siding bill can I claim the whole expense because it improved the ascetic of the rental, or should I only deduct 30% to keep consistent with the depreciation %?

Thanks!

@Steven Hamilton II  

I am in a similar situation with my home. I get that something that affects the whole building needs to be prorated, but what about when there is an expense that is specific to JUST the ADU (like flooring only in the ADU)?

Conversly, what about an expense for just my portion of the home (like new flooring in my part of the home)? Would that be pro-rated too?

@Jonathan Godes  ,


If it is rental only then it belongs 100% to the rental; however, for anything to your main home is entirely personal. You only have to worry about expenses that are prorated. 

Flooring in your main home is 100%personal. Whereas flooring in the ADU is entirely business.

@Steven Hamilton II  

What about an expense that is a shared benefit? Roof, siding, lawn care, etc? If I don't keep the roof in good repair, we are both screwed.

Originally posted by @Jonathan Godes :

@Steven Hamilton II 

What about an expense that is a shared benefit? Roof, siding, lawn care, etc? If I don't keep the roof in good repair, we are both screwed.

 It is prorated.

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