Rental of part of residence

From: Avrum Lapin <avrum113@earthlink.net>
Subject: Rental of part of residence
Date: Wed, 17 Jun 1998 05:51:35 -0700 (PDT)

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	I have a few questions about renting out part of a residence.  I've
read Chapter 10 of Pub 17 and recognise that that the rent is income which
I can offset by certain expenses.

If I choose what I will call renting for profit I can include depreciation
of the rented part of the building as an expense.

1.	Only the building and not the land is depreciable. How do you
arrive at what portion of the property is land and what is the building if
the residence is 30 years old and in an urban tract (Los Angeles).

2.	I recognise that the property basis in the future will be the cost
less the depreciation charged off.  When I sell and I want to exclude the
first $500K (married) of capital gain must I be tenant free for 2 years or
just a resident. (where did you find the answer)

If I choose to rent "not for profit" I recognise that I can't depreciate
and that expenses are deducted as as Miscellaneous expenses on Schedule A
subject to a 2% of AGI exclusion.

3.  	Under the "not for profit" situation must I be tenant free for 2
years to exclide the $500K

Other than the depreciation deduction and the 2% exclusion why would one do
one rather than the other.

Thanks

Avrum Lapin
Upland., CA





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