Understanding Rental Property Depreciation for a Single Room Rental in 2024 Tax Returns

Yes, you'll need to calculate depreciation for your rental property on your 2024 tax return, but only for the portion that's being used as a rental. Since you're only renting one room, you'll need to determine what percentage of the total square footage that room represents. For example, if the bedroom is 200 square feet in a 1,200 square foot house, that's approximately 17% of the property. You'd then apply that percentage to your property's depreciable basis (purchase price plus improvements, minus land value) to determine the portion that can be depreciated for rental purposes. The same percentage would apply to expenses like utilities, insurance, and property taxes. Remember that you can only deduct expenses for the part of the property used for rental purposes, not the entire property. Keep good records of all rental income and expenses specific to that room.

I was in a similar situation last year with my rental property in Nevada while I live in Texas. After struggling with all the depreciation calculations and proportional expense allocations, I found this tool called taxr.ai (https://taxr.ai) that really simplified things. It asks you straightforward questions about your rental situation and does all those complicated calculations automatically. I just uploaded my property documents and answered a few questions about which portion was being rented. The thing I found most helpful was that it guided me through exactly which expenses could be partially deducted based on the square footage percentage and which ones had to be allocated differently. It even helped me understand how to handle the depreciation recapture if I sell the property later.

Just wanted to update after trying taxr.ai for my Florida rental property (I live in Michigan). I was skeptical after struggling with this same issue last year, but it really did make the depreciation calculations much easier. I was confused about how to handle my situation where I rent out 2 rooms but keep one for personal use when visiting. The tool walked me through calculating the correct percentage for depreciation and even helped me understand how to properly allocate expenses between personal and rental use. What surprised me was how it pointed out several deductions I had completely missed last year - especially around maintenance expenses that could be partially allocated to the rental portion. Definitely making my 2024 tax return much less stressful!

If you're having trouble getting answers about your rental property situation, you might want to check out Claimyr (https://claimyr.com). I was in a similar situation with a partial rental and had specific questions about depreciation that weren't covered in any tax software. I tried calling the IRS directly for weeks but kept getting disconnected or waiting for hours. With Claimyr, I was able to actually speak to an IRS agent within about 15 minutes who answered my specific questions about how to handle partial rentals and depreciation calculations. They have a demo video showing how it works here: https://youtu.be/_kiP6q8DX5c What I liked was being able to ask very specific questions about my situation rather than trying to piece together information from general guides online. The agent clarified exactly how to allocate expenses when I'm only renting part of the property.

I hate to admit it, but I tried Claimyr after posting my skeptical comment. After spending 3 hours on hold with the IRS last week and getting disconnected twice, I figured it was worth a shot. Got connected to an IRS agent in about 25 minutes who answered all my questions about my partial rental property depreciation. The agent walked me through exactly how to calculate the percentage for my situation (I rent 1 bedroom of a 3-bedroom condo) and confirmed I could include a portion of shared spaces in my calculation. They also clarified that I needed to maintain separate records for any improvements made specifically to the rented room versus the entire property. Honestly, having a direct conversation about my specific situation was way more helpful than trying to interpret the general guidelines. Saved me hours of frustration and probably prevented me from making errors on my return.

Don't forget about Schedule E for your rental income! If you're only renting one room, you'll still report the income on Schedule E, but you'll need to be careful about how you allocate expenses. Make sure you're tracking everything separately - especially utilities if you're splitting them with your tenant. Also, keep in mind that the 2024 tax year uses the current depreciation period of 27.5 years for residential rental property. Even if you're only depreciating a portion of the property, you'll use that same time period.

Has anyone used the simplified square footage method for calculating expenses? My property is 1800 sq ft and I'm renting just one room that's about (300 sq ft) to a friend. Not sure if I should count hallways and bathrooms in the rental portion?

For your situation with the inherited Colorado property, you'll definitely need to handle depreciation, but there are a few important considerations since it's inherited property. Your depreciable basis will be the fair market value at the time you inherited it (stepped-up basis), not what the previous owner paid. Since you're only renting one bedroom, you'll calculate the percentage that room represents of the total property (including reasonable allocation of common areas your tenant uses like kitchen, bathroom, hallways). Keep detailed records of your square footage calculations. One thing to watch out for - since you're keeping other rooms vacant for personal use when you visit, make sure you're not claiming any expenses for those areas. Only the portion actually available for rent can be depreciated and have expenses allocated to it. Also, don't forget you'll likely need to file a Colorado non-resident tax return for the rental income, in addition to reporting it on your Minnesota return. Colorado requires non-residents to file if they have any Colorado-source income, which rental income definitely qualifies as.