Preparing the numbers for your Airbnb rental can be easier if you prepare them for the Airbnb only. See the answer to your questions below.
Question 1: When you have expenses that are for both the rental and the personal use of the space then it can get quite complicated for any tax software. The best advice in your situation is for you to break out the expenses for the Airbnb and then enter them as 100% rental including the 1098 mortgage interest.
Question 2: Yes you would use costs that are associated with the entire property when using a space for Airbnb.
- To use the cost of the home as an asset for depreciation you would do exactly as you indicate. Determine the square feet of the area divided by the total area of the home and then divided by the time of Airbnb use versus personal use.
- Start with the purchase price, purchase expenses, capital improvements to the entire home and to the Airbnb space, then apply the formula for the depreciable basis for the home. Based on usage this figure could vary each year.
- This same formula would be used for utilities, internet or other expenses that are for the entire home.
As a suggestion you could start using an excel or similar platform to enter your data regularly with formulas already set up. At tax time, you could just use the sheet to enter your tax return data.
@RichMM
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