Rental expenses

[appelman]

Apparently I misunderstood the original post.

I have a single client that owns a 5 bedroom home. He is renting out 4 of the bedrooms to 4 single men, they all have access to the common areas. My client pays all the utilities. My question is concerning how to prorate the expenses, depreciation etc. Can I report the income on Sch E and take a 4/5th of all the expenses including depreciation on 4/5 of the house?

I took the original post to mean that the owner was living in the home and occupying the 5th bedroom. If this is not the case, than other posters are correct that vacation home rules do not apply. However, the thread seems to have become unclear as to whether we are talking about Zahl's original post or the entirely different situation described by DMICPA. In Zahl's post, nobody has explained what is being done with the 5th bedroom. That seems to be a fairly critical point. Incidentally, a separate living unit does not require a separate building -- a so-called "mother-in-law suite" will qualify. And why are we dealing now with a 2006 post?

[taxea]

I would say the $25 difference for a relative who should be expected to treat the property better than a stranger, and also since he's collecting rents and overseeing repairs, actually IS FM rent.

As long as each roomer has the run of the place, the expenses including depreciation of the whole place are deductible. Really no difference than if one person or family rented the single family dwelling.

Now if one room at a time is unavailable for rent during a renovation or whatever, then having the three "parts" of the house as three lines on the depreciation schedule by square footage, and dividing expenses into three parts by the square footage now will save splitting it up later when that back bedroom leaks and you can't rent to a third guy for a few months until you repair. But, it's still going to add up to the whole house.

I wouldn't enter three separate depreciations. I would combine them into one and if any area included is not avail to rent during any period I would then adjust the depreciation expense for that period. Why do more work than necessary? And I still think the son's area should be looked at as family or the fmv of the rent for his room taken and the discount be expensed. I also don't agree that the depreciation should be for the total residence.