Trump Floats Personal Residence Depreciation—A Big Move That Can Unlock Savings For Investors
Summary
President Trump floated the idea of allowing homeowners to claim depreciation on their personal residences, potentially offering significant tax savings. If enacted, this could be a double benefit for real estate investors who also own their homes. However, the proposal is still in the early stages, with many details needing to be worked out by Congress.
Key Insights
- •The president suggested allowing homeowners to claim depreciation on their personal residences, similar to how it works for investment properties.
- •Depreciation on a rental portion of a home is calculated by multiplying the adjusted basis of the property by the rental use percentage.
Action Items
- ✓If you rent part of your home, consult with an accountant specializing in short-term rentals to properly calculate and claim depreciation.Effort: mediumImpact: medium
Common Mistakes
- ⚠Renting individual rooms and sharing living spaces complicates depreciation calculations, potentially leading to errors if not handled correctly.
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