Question

Multi-family rental property

Forum|Forum|6 years ago
April 5, 2020
1 reply
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I own a duplex. I live in one unit and rent the other unit. The hot water heaters are separate. I had to replace the hot water heater on the rental side, so the expense is not an expense in common. How do I enter the expense?

Critter

Employee

Depends ... if this is the first time you are entering this rental you can enter 1/2 of the property as a separate entity and split the common expenses between the Sch E and the Sch A. This way the one property is treated as 2 for tax purposes. And all the repairs for the rental are reported as expenses for the rental.

If you have had this property in use prior to this year AND you enter the entire duplex as one property and have let the property divide the common expenses for you then watch for the screen that asks about direct vs indirect expenses ... a repair to the rental side ONLY is direct.