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Level 2
posted Jun 8, 2022 10:09:40 AM

Rental property

We are renting our dwelling about one-third of the year through AIRBNB. How do we allocate utilities as a deduction to offset income and what is classified as a utility cost?

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2 Replies
Expert Alumni
Jun 8, 2022 10:27:01 AM

Hello @ferrrich 

 

You can allocate utility costs by using the actual costs we the portion of the dwelling used by AIRBNB. You will have to keep track of when it is rented out and apportion the costs per that period.  On your tax return, you will offset the costs calculated (as described above) against the income gained by the AIRBNB.

 

Thank you!

Level 2
Jun 8, 2022 10:41:36 AM

On the IRS publication 527, Residential Rental Property, section 5 Personal Use of Dwelling, contain a lot of information about pro-rating based on days rented versus not rented. On the worksheet 5-1 Percentage of expenses allowed for rental. This seems to imply you get to allocate your utilities annually based on this percentage. This would be a lot simpler than actually trying to allocate utility costs for renters time.

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