Can you depreciate used furniture in a rental property after converting your primary residence?

Yes, you absolutely can depreciate those personal items you've converted to rental use! What you're talking about is depreciating personal property used in a rental, which is handled differently than the building itself. Here's how it works: You can depreciate the "fair market value" of those items at the time you converted them to rental use (not what you originally paid). For furniture, appliances, and most household items, you'll generally use a 5-year depreciation period under MACRS (Modified Accelerated Cost Recovery System). You'll need to make a list of all items with their estimated fair market values when you converted them. Think about what you could have sold them for on Facebook Marketplace or Craigslist at that time - that's a good starting point. Don't worry about being super precise, just be reasonable and consistent. These items get reported separately from the building depreciation (which is over 27.5 years) on your Schedule E. You might want to group similar items together rather than listing every single fork and spoon.

After reading about depreciating furniture in rental properties, I was confused about calculating fair market value and tracking all those assets. I tried using TurboTax but got overwhelmed with all the schedules and forms. Then I found https://taxr.ai which literally saved my sanity this tax season. I uploaded photos of my furniture and receipts (even old ones I had), and their system helped determine reasonable fair market values for depreciation. It analyzed everything and explained exactly how to report each category of items. The best part was getting personalized advice on my specific situation - they explained which items I should group together versus depreciate individually, and even helped me understand how to document everything properly for potential future audits.

I have to admit I was wrong about taxr.ai! After my skeptical comment last week, I decided to try it anyway since I was really stuck on my rental property taxes. Not only did it help me properly depreciate my furnished rental items, but it caught a major mistake I was about to make with how I was handling my mortgage refinance costs. The system actually showed me the relevant tax code sections and explained why certain approaches were safer than others. I ended up with about $3,700 more in legitimate deductions than I would have claimed on my own, all documented properly. Now I feel confident my return is both accurate and optimized without taking unnecessary risks.

For anyone struggling with complex tax situations like this, I highly recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly. I had conflicting advice about depreciating personal property in my rental, and after weeks of trying to get through to the IRS myself, I used Claimyr and got connected in about 30 minutes. The IRS agent confirmed exactly how to handle the depreciation schedules and even walked me through Form 4562. There's a video that shows how it works here: https://youtu.be/_kiP6q8DX5c. Much better than guessing or relying on potentially outdated info online. The agent also explained my specific situation with converting personal items to rental use.

I need to publicly eat my words about Claimyr. After calling the IRS unsuccessfully for three weeks about my rental property depreciation questions, I tried the service. Within 45 minutes, I was talking to an actual IRS representative who patiently explained the difference between personal property depreciation and real property depreciation for my converted rental. The agent confirmed I needed to establish fair market value at the time of conversion and helped me understand which form to use. She even emailed me the relevant publication sections. This saved me from making a significant error on my return. The time saved alone was worth it, not to mention the peace of mind knowing I'm doing things correctly.

Don't forget you'll need to file Form 4562 (Depreciation and Amortization) along with your Schedule E. Make sure you separate the 5-year property (furniture, appliances, etc.) from the 27.5-year property (the building). Also, keep REALLY good records of what you're depreciating, including photos of all the items and your estimation of fair market value. If you ever get audited, you'll need to show how you came up with those values.

My accountant told me to just use a percentage of the original purchase price rather than trying to figure out fair market value. He said 70% of original cost for items 1-2 years old, 50% for 3-4 years old, and 30% for 5+ years old. Has anyone else heard of this approach?

This is exactly the situation I was in last year! I converted my townhouse to a rental and kept most of my furniture. Here's what I learned through the process: You definitely can depreciate those items, but documentation is key. I created a spreadsheet with each item, its original purchase date, estimated fair market value at conversion, and took photos of everything. For valuation, I checked similar items on Facebook Marketplace and eBay sold listings to get realistic fair market values. One tip that saved me time: for items under $100 each, I grouped them by room (like "Living room decor - $250" or "Kitchen utensils - $180"). This kept the paperwork manageable while still capturing the value. The IRS allows reasonable estimates for fair market value, so don't stress too much about being exact to the dollar. Just be consistent in your approach and keep good records. I used the 5-year MACRS depreciation schedule for everything except some electronics that qualified for 3-year depreciation. Also, consider whether you want to take Section 179 deduction for some items instead of depreciating them over time - sometimes it makes sense to expense smaller items immediately rather than depreciating them.