Keep “your” stuff separate from tenants. Let your cpa help you. You may want to look into “homesteading” the home as well. Homestead in some states, like Fla, is very beneficial tax wise.
@Erik Karpinski , Congrats on this.
1) You cannot depreciate the portion of the house that you occupy/use. ( your room, kitchen, living room). These are common area that have personal use as well. The court have said that expenses allocable to the common areas are not deductible (Anderson).
2) You will have to find a reasonable way to depreciate based on # of room, or square footage of room that is rented.
3)Yes, utilities and those kind of other expenses can be allocated to rental activity based on the allocation percentage. I would use same depreciation percentage as expense allocation percentages.
4) The expenses related to just the rented portion are 100% deductible. ( e.g- replacing the carpet in the rented room)
Just like every other expenses, keep the receipts and show how you came up with the allocation. This is what I Use. It is very comprehensive with actual depreciation and interest expense. It has multiple tabs, I am just sharing one. there is a section where you can use allocation method based on room or SQ footage.
Homestead exemption is state specific but it applies to owner occupied primary residence in FL. I’m not sure what state you are in. You get a little more if you are over 65 in addition to what is available to all. Biggest help to me is minimizing property tax increases and asset protection.
Great documentation from @Ashish Acharya
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