I live on the upstairs floor of my home and the downstairs is rented out as a short-term rental. I'm getting mixed responses from help agents about how to divide this up and calculate expenses.
As I understand it:
- The home office should be a portion of only half of the home that is used for personal use. Let's say 50sqft inside the 500 upstairs of a 1000sqft home.
- For the home office deduction, all expenses, repairs, etc that apply to the entire home should be divided in half to reflect half used for personal occupancy.
- For the rental property deduction, the same should apply with everything divided in half to reflect the other half being used for rental property.
- For expenses that apply to only the small business or the rental portions, they should be captured in each respective section in addition to the 1/2 captured that apply to the whole home.
Thanks in advance for any guidance.
