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Case Study 1: Rental vs. Personal Use (continued)Gloria paid $100 to wallpaper only the tenant's room. She also paid these expenses for the entire property:
The expenses for the entire property total $2,900. What are the allowable expense deductions on Gloria's Schedule E? What are the allowable expense deductions on Gloria's Schedule A? Click here for an explanation. Schedule E is used to report business expenses. Use it to report expenses that apply exclusively to the rental room and the allowed percentage of expenses that benefit the entire house. That is:
The deductible rental expenses that Gloria would report on Schedule E is $390 (that is, $100 + $290). If Gloria can itemize personal deductions using Schedule A, she can use it to report the deductible expenses that benefit the entire house minus the percentage that applies to the tenant's room. That is:
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