when you've added a rental onto your property where you live, how is the rent handled?

Forum|Forum|11 months ago
April 11, 2025
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we built an ADU and some expenses are shared and some are just the ADU (attached dwelling unit) - like a mother-in-law cottage...

AmyC

Employee

The sch E is filed to enter the rental income, depreciate the ADU, furnishings, appliances, etc. You will have to determine the percentage of shared expenses and enter just that portion. There is another option for you to say your rent part of your home and let the program do the math but I don't like that option. You can try it and see the difference.

See Where do I enter income and expenses from a rental property? and then see another post of mine to enter the assets.

Reference: About Publication 527, Residential Rental Property (Including Rental of Vacation Homes)

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