[johnhuan]

I bought a house 10 years ago. I moved out and rented it out since 2008. How do I depreciate it? Do I take the purchase price 10 years ago or take the government assessment value of 2008? The purchase price was 200K in 1998 and the assessment value in 2008 was 300K. Please help. John

[MLSNC]

When personal use property is converted to business use, the basis for depreciation is cost or fair market value, whichever is less. Generally when dealing with real estate cost is less than the FMV so you would depreciate the house based on the original cost. Remember land does not get depreciated so you must allocate the basis between the house and the land. You can also add major improvements you may have made since you owned it, things such as fences, HVAC, roof, pool, etc.