I am closing on a home in early January and trying to plan accordingly for next year. It is a small 2 bedroom home with a bathroom and kitchen/living area. I am planning on airbnbing one of the rooms out while living in the other. Would I just be able to deduct 50% (yes the guest can use the bathroom and kitchen/living areas) of common area expenses?
I think i read that I could go either by rooms or square feet? the room i am airbnbing would be a tad smaller, so if I can go by % of rooms that would be easier.
Yes you can use any reasonable method. "Reasonable" is vague obviously and depends on facts and circumstances, but using number of rooms in your case would be reasonable.
And don't forget depreciation on that portion as well.
You would expense/capitalize 100% of the items that are directly associated with the room that you are renting out.
Example - you fix the flooring of the room you are renting out. You would expense/capitalize this amount 100%
Example - You place a bed that will be used by the tenant. You would expense/capitalize this amount 100%
Other items that effect the full house(your room and the tenants room) would be expensed/capitalized over some reasonable method such as square footage of tenants room / square footage of your room+tenants rooms or tenants rooms / total rooms.
Items that would fall under this would be depreciation of home, mortgage interest, water, garbage, real estate taxes, etc.
let me know if you have any other questions.
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