How to split expenses for home office if part of home is rented out?

[pixelbaker]

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.

[DavidD66]

It seems like you have a pretty good grasp of how you should treat your expenses.  In addition to allocating your expenses, you will also need to depreciate 50% of the home for the rental, and another 5% for your home office.  There is also the option of using the simplified method for your home office.  For more information see The Home Office Deduction