4 Comments January 29th, 2009

Can I deduct home improvement expenses if I am reporting rental income from renting a room in my home?

sunfish024 asked:


I have a 3-bedroom house and I rent out one of the rooms for extra income. I have also invested several thousand dollars in home improvement last year, much of it on repairs to the extra bathroom used by the roommate-tenant.
Does anyone know the rules on reporting the rent obtained from the roommate, and also the deductions I would be allowed on the improvements because of this partial rental space in the house?

This entry was posted on Thursday, January 29th, 2009 at 5:11 am and is filed under Home Improvement. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

4 Responses to “Can I deduct home improvement expenses if I am reporting rental income from renting a room in my home?”

  1. Norm Says:
    January 29th, 2009 at 7:25 am

    You have to take the percentage of floor space you rent. Say it is 20%. Then you deduct 20% of repairs and you can take depreciation on the house and deduct 20%

  2. randal z Says:
    January 31st, 2009 at 2:04 am

    Contact H&R Block at:http://www.hrblock.com/index.html?otpPartnerID=2402&SID=33195&CID=289728&OfferId=ps_brand&omnisource=GGL|CAMP009HRB+Brand|ADGP009HRB+Other|KWRD009h+r-block
    or the IRS at:http://www.irs.gov/
    They will have that information. I’m sure you can deduct part of the costs directly used to remodel the part used for your tenent. You’ll have to check on what part.

  3. My 2 Cents Says:
    February 1st, 2009 at 9:02 am

    I believe you can; when you fill out your income tax forms for rental income there will most likely be a section where you can put improvements, etc. I would consider it like owning your own business where you write off repairs, items bought for the company, etc.

  4. rhsaunders Says:
    February 1st, 2009 at 7:23 pm

    As for expenses, those which are attributable to the rental portion of the house are either deductible or capitalizable depending on whether they are repairs or upgrades. Expenses attributable to the whole house must be apportioned between the rental part and your part; in my case, the tenant was one-fifth of the population and occupied about one-fifth of the area of the house, and the IRS auditor had no problem with an apportionment on that basis. You take depreciation on your tax return on the rental portion, and on any capital improvements made to it. When you sell the place, the taxes get a bit complicated: the usual carryover rules apply to your portion, but capital gains and loss rules apply to the rental portion, including the basis change arising from tenant-space apportionment of improvements. Which means that for tax purposes, it’s two separate (but simultaneous) sales. The rent revenue is taxable, but you deduct related expenses, including apportioned interest, taxes, and insurance as well as repairs and depreciation on improvements.