Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Schedules K-1 and Rental Income Workout

Special Allocations

Case Study 1: Rental vs. Personal Use

Gloria rents one room in her house to a tenant. The total square footage of her house is 1,000 square feet. The rental room measures 10 feet by 10 feet (100 square feet, or 10% of the total house). She may deduct:

  • 100% of any expenses that relate only to the rental portion of the house, such as repairs or upgrades to the rented room
  • 10% of any qualified expense that benefits the entire house

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