I have some additional questions regarding renting a bedroom in my home in 2012. I started advertising the bedroom on April 8. It was rented on May 27 and remained continuously rented for the remainder of 2012 for a total of 268 days. On line 1b of Schedule E I would indicate 268 Fair Rental Days. I believe that I should indicate 0 Personal Use Days since the bedroom was not used by myself or anyone else during the first 98 days of the year. If my calculations are correct, then my rental expenses are greater than my rental income, so I should use Worksheet 5-1 provided in Publication 527, Residential Rental Property. Using this worksheet the total days available for rent at fair rental price is 268, the total days available for rent but not rented is 49, and therefore the total days of rental use is 219. Since the total days of personal use is 0, the total days of rental and personal use is 219, and the percentage of expenses allowed for rental is 100%. So it appears that I would calculate the amount of rental mortgage interest by multiplying the total amount of mortgage interest I paid in 2012 (even though I did not even begin to advertise the bedroom until April 8) by the portion of my home that is rented (including one-half of the shared areas such as the kitchen). However it appears that depreciation
would begin in April using the mid-month convention. Have I stated everything correctly?
Coming back to the fact that I am also using a small portion of my house as a home office, how and when do I account for fact that the space I'm renting now reduces the space of my portion of the house. For simplicity, say that my home office is 4% of the total space of my house. Now say that my renter is renting 50% of the total space of my house. So now my home office accounts for 8% of my portion of the house. But to calculate the actual percent to use on line 7 of Form 8829, do I proportionally average 4% and 8% based on the date that the bedroom began to be rented (May 27), the date that the bedroom was advertised for rent (April 8), a depreciation mid-month convention date (April 16 or May 16), or do I calculate a simple average (6%) based on January 1 since it appears that I am able to deduct rental expenses such as mortgage interest for the entire year?
Lastly, on what lines on Form 8829 and Schedule E do you recommend listed condominium association fees? Since these fees pay for insurance, maintenance, and utilities (such as water and sewerage), I'm thinking that it would be best to include the association fees on line 21 (Other expenses) on Form 8829 and line 19 (Other) on Schedule E.