What % of your house is considered a rental for tax purposes?

The unfinished cellar would be considered part of the common area. Renting one out of four floors = 25%. No need to make it more specic or complicated.

daveinbedstuy

in General Discussion 8 years and 4 months ago

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gemby | 8 years and 4 months ago

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We have a house with an unfinished cellar and four levels. We rent out one level. For tax purposes what percentage of the building is a rental unit?

25% – The percentage of the inhabitable square footage (not counting cellar). In this scenario the cellar/ mechanicals serve the rest of the building.

20% – The percentage of the total square footage including the unfinished cellar.

Or somewhere in between– is the cellar square footage counted but less valuable than the rest of the house? This options sounds messier… A complicating factor is we may finish the cellar at some point and either give the space to the rental unit, or ourselves (with a passthrough).

My accountant asked me for the percentage, but didn’t advise how to calculate it.