House Hack Tax Break

[Victoria Radcliff]

I working on buying my first property to do a house hack in a single family home with a rent by room approach. I was wondering when filing for taxes if there is a tax break or if you would end up paying more in the long run? Are there any pros and cons for taxes with a house hack?

[Evan Polaski]

@Victoria Radcliff, definitely consult with a CPA, I am not one so take this with a grain of salt.  

I could see how you could make a case for writing off expenses and being able to depreciate the portion of the house you are renting.  i.e. if you buy a 4 bedroom house, and each house is 200 sq ft.  House is 2,000, sq ft.  You are renting out all three additional rooms, so 600 sq ft, and your roommates have a full bath they share that is 100 sq ft. I could see how logically, you should be able to depreciate 700/2000 sq ft, and of course if you have to repaint bedrooms, replace a toilet, etc those expenses can be written off against the income.  (Consult with a CPA, and you are probably increasing your audit risk by doing so).

This would be similar to writing off a home office and various expenses associated with that office, or my wife and I use our house as storage for her staging furniture, and can write off the proportionate sq ft of the overall house for that storage.