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If you rent out part of your house how do you figure the amount of deductible expenses like utilities and insurance?


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2015-07-16 18:07:30
2015-07-16 18:07:30

Tax Deductions for Partial Rentals

Here is some advice from Wiki s community members:
  • If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property.
  • If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. You can use any reasonable method for dividing the expense. It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. However, the two most common methods for dividing an expense are one based on the number of rooms in your home and one based on the square footage of your home. [See Publication 527 at IRS.gov for more information.]
  • IN the case of electrical use, install a separate electrical meter for the rental unit, and insist that the tenants have to put up the deposit to get the "power turned on" themselves, that way you are protected if they don't pay the electric bils. Same thing for telephone and cable tv services.

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