1. Divide by 3 may be an option - if that is a reasonable method. . The bedroom is the rental property but you have rooms that are mixed use, like the kitchen and living room
The IRS states in pub 527 on page 16: If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. You can use any reasonable method for dividing the expense. It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home.
2. Yes. If the bedroom sits there not being used by you and waiting for a tenant, it is still rental property. Should you decide to use the room, then it is personal use for those days. See chapter 5 of pub 527.
3. No. You can have a loss. Certain expenses are limited for you as your main home. Page 19 of pub 527 states: However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. To figure your deductible rental expenses and any carryover to next year, use Worksheet 5-1.
The worksheet is page 20 and it will show what is allowed, what is carried over, etc.
Be sure to document your thoughts in your tax file. If the IRS sends you a letter in 3 or 4 years, you will need to be able to explain your reasoning.
@wag1
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