How to track deductible expenses in owner occupied duplex?

[Dan Bennett]

Hi folks,

I recently purchased a duplex, am occupying one unit and renting out the other.  Everyone seems to recommend separate bank accounts for the business (as landlord, collecting rent, paying expenses, repairs, etc) and personal.

My question is, since I live in the small unit (maybe 40% of the sq footage of the building) and rent out the other 60%, it's unclear which account I should use for the roof replacement that is going on right now.  My understanding is that I'll be able to get a tax break on 60% of the cost at the end of the year.

I also assume that it's best to pay for the repair out of the rental business account if I can, but I'm not really sure:

1. Since my renters are just moving in, they haven't paid enough into the business account to cover 60% of the roof repair.  Should I fund this account with personal money, and then pay out of this account?  Or should I just track this expense outside the business account (pay from personal, but write off 60% anyway)
   1. The roof is the first such issue, but there are others as well that have me in a similar situation.
2. The two units share a few utility meters, should I pay utilities out of the business account or personal?
3. Should I be paying 60% of each expense from the business, and 40% from the personal account?

Also, the unit is my primary residence, and it's in Oakland, CA if that has any bearing on the situation.

Thanks for any insights!