Any expense occurred before placed in service date is capital expenditure, can only be added to cost basis or depreciation basis. IBecause you spent X amount to get this house ready for rent, it's not on-going expense but initial aquisition cost that has to be added to cost basis for capital gain and deprecation basis.
4. 房屋如何折旧报税？
The depreciation basis is the cost of aquisition, not the value of the house at the time of you moving out. Therefore, the depreciation basis is the value of the structure (not land) when you purchased this property + improvement made before place the property for rent.
It's 27.5 straight line depreciation. For partial year depreciation calculation, use a tax software.
5. 如果第一年，租金不多，需要房屋折旧吗？
Yes. Don't be lazy. YOu have to keep track of depreciation and loss carryover in a spreadsheet througout the years of ownership so that you know how to deal with depreciation recapture at the time of the sale.
本人在加州，刚刚换了房子。正在装修旧房子，准备出租三年再卖。请教各位前辈解惑。
1. 房屋保险要换成出租屋的保险。
2. 自主到出租房的转换是在什么时间点发生？假如是5月租出去，是不是到2026年5月之前卖都满足2/5要求。
3 装修费用如何报税？
4. 房屋如何折旧报税？
5. 如果第一年，租金不多，需要房屋折旧吗？
The key concept is placed-in-service date. It is the date the property is READY to be rented. Usually it is the time you placed the advertisement.
1. 房屋保险要换成出租屋的保险。
and you should also require tenant to purchase renter's insurnace.
2. 自主到出租房的转换是在什么时间点发生？假如是5月租出去，是不是到2026年5月之前卖都满足2/5要求。
see above, placed in service date.
3 装修费用如何报税？
Any expense occurred before placed in service date is capital expenditure, can only be added to cost basis or depreciation basis. IBecause you spent X amount to get this house ready for rent, it's not on-going expense but initial aquisition cost that has to be added to cost basis for capital gain and deprecation basis.
4. 房屋如何折旧报税？
The depreciation basis is the cost of aquisition, not the value of the house at the time of you moving out. Therefore, the depreciation basis is the value of the structure (not land) when you purchased this property + improvement made before place the property for rent.
It's 27.5 straight line depreciation. For partial year depreciation calculation, use a tax software.
5. 如果第一年，租金不多，需要房屋折旧吗？
Yes. Don't be lazy. YOu have to keep track of depreciation and loss carryover in a spreadsheet througout the years of ownership so that you know how to deal with depreciation recapture at the time of the sale.
举例如下
购房60万
装修10万
租三年，折旧7万
三年后，卖130万
profit = 130 - 8(agent cost) - 60 - 10 +7 (折旧) = 59万
这个算法对吗？
另外如果这三年，租房是loss, loss 可以继续carry over to reduce future tax, even if there is no rental house in future?
profit = 130 - 8(agent cost) - 60 - 10 +7 (折旧) = 59万
taxable gain = 130 - 8 - 60 - 10 = 52, 50万 this is not taxed because it is 2 in 5 primary residence. so you have 2万需要交增值税。
depreciation recapture is 7, this can be reduced by loss carryover. depreciation recapture is taxed at income tax rate.
2. carryover loss
carryover loss is used when the rental house is sold against taxable gain and deprecation recapture.
also loss in rental can be used against gains in other rental property.
deprecation recapture will end up more tax, right?
Worry about that later.
or for decrease income in future.