My spouse and I bought our first home in October 2020 and we have a tenant who rents out 2 of the 3 bedrooms and makes use of the common spaces (living room, kitchen, dining, family room). He signed a lease and pays $600 a month. Our mortgage is $1680.
We like living with him and it's been nice to offset some of our costs. But, I don't know how to report this income properly.
I am trying to complete Schedule E. I filled out all of the expenses, dividing out for the portion of the home he occupies and shares.
I also filled out the "new asset" information to determine the depreciation of the home, using tax-assessed land value and improvement values. But here is where I'm concerned. Am I supposed to fill out this depreciation as a portion of the home? I used the fully assessed values.
Currently, my rental income is showing a loss. My understanding is that I'm not supposed to claim a loss in a roommate situation. But I don't know how to fix this.
Thanks so much for any help anyone can provide!
