We own a second home that we use about 4 months of the year and (attempt to) rent-out the remaining 8 months. Of the time the home is being used, we are roughly 60% own use and 40% rented-out. Consequently, not all the expenses of the second home are deductible against our rental income, including the depreciation expense.
I can't seem to figure-out how to best model this. I tried creating a "60% use second home" and a "40% use rental home" to get the deductibility of the cash expenses correct but I don't know how to handle the depreciation properly. I think that will work for cash expenses, however, I still have too big of a depreciation expense against rental income and then too big of a reduction in cost basis upon sale. Not sure where to go here. Any thoughts?
It sounds to me like you're approaching this in a reasonable manner: a second home (valued at 60% of the actual value, etc) on the Property expenses page and then a rental home (valued at 40% of the actual value, etc) on the Rental Property page.
