part personal part rental house

[oceanlovin'ea]

I want to revisit this issue one more time and see what the majority agree on.

Client has rental house. Daughter rents from her and another person also moved in toward end of year and pays rent.
Daughter only paid rent 2 months and then made a deal with parents. She will make 3 car payments a month and not pay any rent until car is paid off. She wants to go back to school full time and can't do that with car payment.

Can I do a rental with the income and only claiming half of the expenses for the period of time that someone was paying rent? If both paid rent it would be very close to fair market rental.

Or am I just plain crazy???

Linda, EA

[Burke]

I would discount the daughter as "renter" altogether. She is living there gratis. I vote with other rental income + 2 mos from daughter, and take expenses based on those months. Although when you get right down to it, it wasn't available for rent as long as the daughter was esconced there, was it?

[oceanlovin'ea]

yes

Always available for a second or third renter in the house. So there would always be some rental income.
That is why I was thinking of dividing the expenses for the months of second renter by 2.

Linda, EA

[Burke]

I agree. I was thinking of the depreciation.