I rent out a separate part of my house which I own. Is it considered a rental property?

[Vanessa A]

Yes.  If you rent out a separate or even a room in your house it is considered rental property.

When the house is not a stand alone unit away from your personal unit, you will need to allocate expenses based on the house versus rental space/expense.  For example, if your house is 2,000 sq. ft. and you rent out 500 sq. ft. you would only allocate 25% of the expenses to the rental.  The other 75% would be personal expenses that are not deductible.