If I use the Simplied Method, it would be $1,250 ($250 sq ft x $5 per sq ft). I paid $1200 mortgage/rent. Full house is 6,000 sq ft. That's 4% (250/6000). Does this mean, I would deduct $48 per month (4% x $1200).
Can I say, I paid $600 per month for rent regardless of size of office. I am thinking, when firms actually rent offices, they pay monthly $1000+ & expense that too. They don't actually count each sq ft to see how much is business only. I feel like, I paid for the basement rent while my brother paid for upper portion. What I do in the basement isn't necessary. I can sleep & have personal activity, as long as all is business property.
I have seen ppl take direct expense of 10K for rent, without consideration of actual sq ft.
If I choose to expense $5K as rent expense, does my brother need to report this as rent income for Sch E or C?
