Schedule E for House Hacking 4-Plex

[Alex Christie]

I've searched with no luck finding the answer to what must be a common situation:

Say I have a 4-Plex, each unit with 2br/1.5ba. I rent three units and owner-occupy 1 bedroom of one unit while renting out the other, what would my schedule E look like? Is that 4 rental units with one being smaller than the others because it does not include my personal residence space? How would I divide the unit I live in between myself and the roommate for tax purposes?

[Dominic Mazzarella]

Quote from @Alex Christie:

I've searched with no luck finding the answer to what must be a common situation:

Say I have a 4-Plex, each unit with 2br/1.5ba. I rent three units and owner-occupy 1 bedroom of one unit while renting out the other, what would my schedule E look like? Is that 4 rental units with one being smaller than the others because it does not include my personal residence space? How would I divide the unit I live in between myself and the roommate for tax purposes?

For tax purposes, you’d report the three fully rented units on Schedule E as rental income and expenses. For the unit you live in, only the portion you rent out (the one bedroom) would go on Schedule E, while the part you personally occupy is considered your primary residence.

To divide expenses, you’d typically prorate based on square footage or another reasonable method. For example, if the rented bedroom is 50% of your unit, then 50% of that units expenses (like utilities, mortgage interest, and maintenance) could be allocated to rental expenses. I believe the rest would fall under personal expenses.