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.