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petermoss
New Member

Schedule E ownership etc

I rent out a guest room in my apartment on Airbnb during the summer season (not full time). I am a renter, not an owner, of the apartment. And I live in the apartment full time, 365 days/year. I'm confused about almost all of the sections on Schedule E.

4 Replies
petermoss
New Member

Schedule E ownership etc

I should add that my main question is "Owner-occupied rentals: percentage of rental use" ... what does this mean?

In 2020, I lived in the apartment 100% of the time, and had guests during part of that time (29 days, which I already entered somewhere else in the system). 

petermoss
New Member

Schedule E ownership etc

To clarify yet again...I live in the apartment and rent a portion of it (a bedroom, sometimes 2 bedrooms). The bedrooms are always listed for rent on Airbnb, but I use all the rooms in the apartment for "personal use" when I don't have bookings. Earlier, when answering the questions, I tried to say that guests used the property 29 days and that I used it for personal use for 365 days, but the system wouldn't let me - so I left the personal use box blank in order to move on, thinking maybe "personal use" doesn't mean living in another room in the same apartment. But I'm still confused.

AnnetteB6
Expert Alumni

Schedule E ownership etc

You have to consider the room (or rooms) that was advertised and rented as a separate entity, not part of your personal residence.  

 

The question is really asking you if you used the rented portion of the apartment for personal purposes.  If it was rented for 29 days, then presumably you did not use that space for personal purposes during that 29 days.  At most, you only used it personally for the rest of the year (366 days - 29 days).  

 

The question about the percentage of rental use is asking you how much of the apartment was considered a rental property.  This would generally be determined by the square feet of the rental room versus the total square feet of the apartment.  

 

All of these questions are being asked in order to determine the pro-rated amount of your expenses than can be claimed against your rental income.  You will only be able to claim expenses for the period of time that the room was rented and for only the portion of the total apartment that was rented.  

 

Here's an example:  Suppose the room was rented for one month or 1/12th of the year.  Also suppose that the rented room is 25% of the total square feet of your apartment.  If your utility bill for the whole year was $1200, then you would be able to claim $25 of that $1200 against your rental income.  

 

@petermoss

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Carl
Level 15

Schedule E ownership etc

I rent out a guest room in my apartment on Airbnb during the summer season (not full time). I am a renter, not an owner, of the apartment.

As I understand the above statement, you do not own any portion of the property you live in, or rent out. You yourself are a renter of the entire apartment, and you "sub-let" rooms out to others seasonally. For this part, the important thing you understand is that while you are required to depreciate rental property that you actually own, you can not depreciate property you do not own. So when asked for your "cost basis" (how much you paid) for the property, your correct response will be ZERO for both "Cost" and "Cost of Land".

Now if you personally paid for any qualified property improvements (I would seriously doubt this, since you don't own the property) then you would be able to report what you paid for those improvements, and depreciate them.

The bedrooms are always listed for rent on Airbnb, but I use all the rooms in the apartment for "personal use" when I don't have bookings.

The questions being asked that pertain to days rented and days of personal use only apply to the rooms being rented. Nothing more. Nothing less.

Earlier, when answering the questions, I tried to say that guests used the property 29 days and that I used it for personal use for 365 days

The total number of days (personal plus business use) can not exceed 365. Therefore, since you do state that you use the rooms when there are no guests, your days rented would be 29 and your days of personal use *of those rooms* would be 336.

 

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