Renting Back House and Front House Separately.

[Darshil Parikh]

Hey BP friends - I have an interesting scenario. I own a property which consists of a front house - 2 beds/2 baths. It came with a detached studio (500 sq ft with a bathroom) - the studio has a separate entrance, private yard. We currently occupy both units. There is only one meter for electricity and water for both units. I would like to rent the front house to someone and rent the studio to myself (LLC - in process of becoming a realtor). We will buy another property which will be our primary residence. I am not a CPA and have handled all my taxes myself - I also own two other rentals. This is a unique scenario - I am wondering if I can deduct 1/3 property taxes, interest, insurance, etc if my LLC is paying me $1,000/mo in rent. Also, can my LLC deduct rent paid ($1,000 to me) from the potential realtor income to offset some income taxes.

Front house tax situation is simple - deduct 2/3 of property taxes, interest, insurance, depreciation to offset rental income.

Back house (studio) - Can I do the same for the back house, only 1/3 of all the expenses noted above? Thanks.  

[Nik Corbaxhi]

@Darshil Parikh, unless someone responds to this and they are a CPA, I would take any responses with a grain of salt! You truly need to seek advise from someone that is qualified to provide you such guidance. Taking opinions on BP is great, but always do your due diligence and speak to someone in person, especially when dealing with the government, in this case IRS. 

Good luck!