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When renting out a room in my residence, 1) is depreciation mandatory and 2) how does one handle split utilities when my renter pays me the split amount?
I bought my first home in 2022 and soon had a friend rent out a room with me as a roommate for part of the year. We had a rental agreement in writing that states the rent amount that would be due. We also split the utilities/electric costs.
Questions:
1) is depreciation something that I am now obligated to calculate and include with my personal tax return (form 1040)?
Or, to put this another way: does the IRS allow me to NOT depreciate (I only rented for less than one year)?
2) because my renter paid his portion of the split utilities/electric costs directly to me, and I then paid the respective bills, does that mean that I must now include my renter's split of the utilities/electric costs as part of my rental income?
Topics:
‎April 16, 2023
12:36 PM