Renting Out Bedrooms

[EC1417]

I bought a 4 bedroom condo in April. It is my primary residence, yet I began renting out 2-3 of the bedrooms starting in June. What is the best way to go about filing the taxes on the income that was coming on on rent for those three bedrooms? How are expenses and depreciation split between personal use and rental - rental square footage % to total or . . . ?

[tbrown21]

You will use schedule E to report income and expenses. You should use square footage of each bedroom to find % you will use for rental expense. You have NO personal use (you do not use the bedroom you are renting).

you should list each bedroom separately unless you don't plan on this being long term. I think you should go to a tax pro the first year at least, or you will end up losing a lot of write offs.

[Carl]

Use the total square footage of all space that is rented out "exclusive to the renter". Do not list each room as a separate rental. It's an absolute nightmare to do it that way.

So the rental use percentage will be that percentage of square footage of your total floor space that is exclusive to the renter(s).

If your house is let's say, 2,500 sq feet with four bedrooms and the 3 bedrooms being rented out add up to 1,000 square feet, then 1000/2500=0.4 or 40% of your floor space that is being rented out.

As a four bedroom house I also expect it has more than one bathroom. So you can include in that the area of any bathrooms that are exclusive to the renters.

A bath that is available to the renters "and" you or "your" guests is not exclusive to the renter.

A bath that is shared by 2 renters but is "not" available to you is still exclusive to the renters.