Hi,
I rent out 2 room out of my 4 bedroom home. Is it okay if I deduct all the expense 50% based on the number of room? or I should go with the square feet calculation.
I know that I can depreciate the house on schedule E for 50% of the depreciation value. I know depreciation will come with the cons --> the recapture thing later if I plan to sell the house. However, I did some more research and seem like depreciation is not a choice, even I don't do depreciation now, IRS still considered it as detailed below
“If you were entitled to take depreciation deductions because you used your home for business, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997.”
My question is I do not rent out the whole property, it's my primary home not a rental property but I do rent out part of it, will I considered that used my home for business and above rule will apply?
Just trying to figure out if I should do the depreciation or not.
Last question about the house expense such as property tax, PMI, interest. I file those cost in Schedule A and therefore I can't put it again in Schedule E. However, what is the best practice here?
Thanks
