Allocating Expenses on BnB for Part of the home AND Part of the year

[Anonymous]

I bought home in June 2017.  I rented 100% of home for rest of 2017 and 2 months in 2018.  Taxes done both years by CPA and depreciation was taken for those tax years.  I moved in 2018, and did not take further depreciation after 2018 since no rental. .. until now.

In 2023 i converted 25% of my home (3 of 12 rooms) to AirBnB.  I spent significant money to prepare (patio, doors, ductless A/C, etc).  I started renting in June 2023.  In addition to shared (prorated) expenses for the rental period (utilities, insurance, cleaning supplies, etc) i also have 100% expenses solely for the BnB (sheets, lamps, small appliances, coffee, etc).  

In Property Profile in Rental & Royalty section, i answered questions based on above (did not click "first year rented" due to 2017/2018 activity), did click that I rent "part of home", clicked that i started renting in 2023.  I entered days of business as 113 (total 2023 days rented and 0 days as personal), and also clicked that property was not rented all year.  (Note that i was not asked when the rental started which seems odd). 

Now for the fun. I first let TT do the math on expense allocations, but it assigns the 25% (BnB percent of home) to everything (not surprising since not asked a start date).  Also, some yearly fees need to be further split beyond straight 25% because the BnB was rented for only 58% of year (insurance, property tax, etc).  Further, i need a place to claim 100% expenses (items solely for BnB).  

The depreciation seemed to go OK ... i valued the home at 25% of the original structure value after the 2017/2018 depreciation was taken.  I was asked / entered the start date (June 2023).  Depreciation on the other improvements also seemed straightforward, although I did not claim Safe Harbor or Special Depreciation 

Any suggestions on how to assign / capture correct expenses for the rental period ... 25% for things like utilities, 25% x 58% for yearly fees (property taxes, insurance), and 100% for solely BnB expenses?

In the meantime i am thinking to not let TT split the expenses and to select that i'll do the math and enter net expenses on my own.  Shouldn't have to do this though. 

[AmyC]

It is better to do it yourself since the IRS allows flexibility. You want to enter the expenses related to the rental portion only. How you choose to allocate the expenses is up to you as long as it is consistent. Many people use square footage, others use number of people, and I am sure there are more methods. As long as you stay the course, the IRS is understanding.

You will need to enter the direct expenses as the full amount - like sheets while you allocate things like utilities and taxes.