Just one Room

Today TaxMama hears from Charles in the TaxQuips Forum.
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He tells us “I am going to rent my second home to some people starting in June.  It will have some furnishings that we will allow them to use.  Our personal property that we don’t want them to use will be in a locked bedroom, maybe 1/10th of the total living area.  We may sleep in that bedroom for a couple of weeks during the year, if it does not adversely affect the taxes.

  I do not see anything in pub 527 that addresses this problem.  How do I figure the taxes?  Which rules do I use? ”

Hi Charles,

First of all, you’re only renting part of the property.  You are keeping 1/10th of it for personal use. Regardless of whether you live in that room or not, you are retaining personal possession of it.
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So you may as well visit as often as your tenants are willing to have you.

You will need to split the expenses of the home between rental and personal to the extent of the square footage of your personal storage unit/bedroom.

This is probably still  cheaper and more convenient than paying for a public storage unit elsewhere and  having to move all those things out of the house. Though, you might be able to  charge a higher rent to make up for it.

 Just curious. What is so precious that you can’t replace if you simply rent out the whole house? I find that we store possessions endlessly that, in the long run, really aren’t worth the cost of the storage; or in this case, rent you could have collected. But we only learn that in hindsight. We all do it, in one way or another.

 Anyway, Chapter 4 of Pub 527 explains how to split the costs. https://www.irs.gov/publications/p527/ch04.html

Incidentally, you can also depreciate the furnishings you have included in the part of the house they are using.

And remember, you can find answers to all kinds of questions about renting your home and other tax issues, free. Where? Where else? At www.TaxMama.com.

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