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Question about tax form-how many days for renting


#1

Hi everyone,
I am doing my tax form now, one question, I rent out part of my house, 2 room out of 3 bedroom house, when I fill the form,they ask how many days I live there and how many days I rent out.
Airbnb report showed I rent out 280 day one room and 170 day another room. but I live in the same house 365days. there is no options for that. Should I put 280 days for renting then 85days for myself? is it correct? please help me! I’m really confused. Thanks!

Grace


#2

In Australia tax year is from July to June in the following year. Would be great if Air let me see my own tax year rather than dump it into a spreadie.


#3

@Grace_Zhou - What country’s taxes are you filling out? That would help us help you.


#4

In my humble uninformed opinion, I would put you live in the house 365 days and you rent out 365 days if your listing is available all year. That way the tax people will know its a shared space or B&B and you can claim the heating costs for the bedrooms when waiting for a booking to come in.


#5

NOLO has a helpful publication "Tax Guide for Short-Term Rentals."


And its purchase price would be a tax-deductible expense!

I would probably approach it by having two ratios of rental days over personal use plus rental days, 280/365 and 170/365, multiplying each of those by the sq footage of each room divided by the square footage of the house, and then applying the two factors to your utilities, etc. and adding the results together for my deduction. Personal use includes time you use the space or friends or family stay for free.

If you are deducting property taxes, you have to multiply again by the ratio of the building tax valuation divided by the total land plus building tax valuation. If you are deducting depreciation, you need to know the basis of your building (generally purchase price plus permanent improvement cost/value), then apply the combo rental days & sq footage ratios.

If you use the place personally for more than 14 days or more than 10% of the number of days it is rented (whichever is greater), it is categorized as a personal residence. Then you can deduct rental expenses up to the level of rental income, but you can’t deduct losses that year, you can carry them forward for future years.

If you/friends/family do not use the rooms at all, ever, not one little bit, when they are not occupied by guests, then you might forgo dividing by the 365, but personally I would be cautious in anticipating how to prove that in the event of an IRS audit, when the rental space consists of rooms directly in the house and not a separate space.

Here is a rather eye-glazing tax summary I’ve posted before:

Regarding Air tax matters on Schedule E vs Schedule C, this is good article:
https://www.therealestatecpa.com/2016/10/20/avoiding-tax-traps-short-term-rentals/

Usual disclaimer, this information is for discussion purposes and does not constitute professional tax advice. Please consult your tax advisor.


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