Can someone plz help me.
I am renting a room within the living area, do I need to depreciate?
according to pub 523 when selling your home
Exceptions. The following situations of business or rental usage don’t affect your gain or loss calculations.
• Space within the living area. If the space you used for business or rental purposes was within the living area of the home, then your usage doesn't affect your gain or loss calculations. Examples of spaces within the living area include a rented spare bedroom and attic space used as a home office. In contrast, business or rental spaces not within the living area affect your gain/loss calculations. Examples of space not within the living area include a first-floor storefront with an at- tached residence; a rented apartment in a duplex; or a working farm with a farmhouse on the property.
• Space formerly used for business or rental. Space that was once used for business or rental pur- poses may be considered as residence space at the time of sale. A space formerly used for business is
Worksheet 2. How To Figure Your Gain or Loss
considered residence space if ALL of the following are true.
– You weren’t using the space for business or rental at the time you sold the property,
– You didn’t earn any business or rental income from the space in the year you sold your home, and
– You used the space as residence space for 2 years out of the 5 years leading up to the sale.
If your space is considered as residence space at the time of the sale, then your former business usage DOESN’T affect your gain/loss calculations, unless you took or were allowed to take depreciation for use of your home for business or rental purposes. See Worksheet 2, line 5
and line 5 is states the following
Any depreciation you took or were allowed to take for use of your home for business or rental purposes
