We recently purchased a vacation home that has a mother in law suite with a full time tenant paying rent. We share some utility bills and maintenance costs (plowing, yard work) with the rental unit. How will deductions work for those expenses? Should it be divided 50:50? Is the split based on square footage? Is there any consideration for the fact that we will be using a smaller percentage of those services since we will only be staying at the property sporadically vs full time like the tenant? We are definitely looking for a tax person to "officially" handle these issues come tax time but I was curious how you guys/gals would handle it.
We recently purchased a vacation home that has a mother in law suite with a full time tenant paying rent. We share some utility bills and maintenance costs (plowing, yard work) with the rental unit. How will deductions work for those expenses? Should it be divided 50:50? Is the split based on square footage? Is there any consideration for the fact that we will be using a smaller percentage of those services since we will only be staying at the property sporadically vs full time like the tenant? We are definitely looking for a tax person to "officially" handle these issues come tax time but I was curious how you guys/gals would handle it.
Usually with the square footage between rented portion and your vacation home. Be aware that some of the common overlapping expenses cannot be deducted. Depending how you use this, you will be subject to vacation home rule plus other proration rules. This will get more complicated than you think.