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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4442
Experience:  35 years tax experience, including four years at a Big 4 firm.
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On Schedule E, what “Type of Property” do I use when renting

Customer Question

On Schedule E, what “Type of Property” do I use when renting out a room in my house?
If I rent 1 out of 4 bedrooms in my house, then 25% is rental and 75% is personal.
In filling out Schedule E, I use my house address in Line 1a, ie*****
Line 1B is for "Type of Property".
How do I indicate that it is a room in my house, and that it is 25% of the house?
I use that fraction to calculate the expenses, but where do I specifically state that that is the portion of house being rented? Without the percentage listed, it may appear the entire house is rented when it actually is not.
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and will assist.

There are two parts to your question. The type of property is residential rental, 27.5 year property. I like to enter all the figures as 100% deductible, so the second part, the business percentage, is 100%. That means the depreciation is set up at the business amount, say 50,000 of a 200,000 building.

My office software does ask to identify the rental as fractional. If you use tax prep software, look for that on your data entry page.

Expert:  PDtax replied 1 year ago.

I like to describe the property as "25% rental of residential real estate,*****, your town, SC". That will tell the tax people you are reporting income from 1/4 of your property.

Expert:  PDtax replied 1 year ago.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 1 year ago.
Hi, the first part of my question is very specifically about Line 1b of Schedule E. I don't see "residential rental" (with or without the depreciation schedule) as one of the choices on that form?
Expert:  PDtax replied 1 year ago.

Got it. 1b should be single family residence. The title you use on 1a as I refer to above will allow you to describe fractional use as rental.