- What is house hacking and how is it taxed?
- How do I calculate which portion of my home expenses I can deduct?
- Can I deduct depreciation on a room I rent in my primary residence?
- Does renting part of my home affect the §121 home-sale exclusion?
- Do I owe self-employment tax on room rental income?
- What are the tax rules if I rent through Airbnb vs a long-term tenant?
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Check my rental tax situation — free →Frequently asked questions
How do I calculate my rental-use percentage for house hacking?
The most common method is the square footage ratio: rented square feet ÷ total home square feet. If you rent a 300 sq ft room in a 1,500 sq ft home, your rental-use percentage is 20%. Apply this to shared home expenses (mortgage interest, property taxes, utilities, insurance) to determine what portion is deductible on Schedule E. For short-term rental of a room that's only rented periodically, you may also apply a time-based allocation within the space.
Do I owe self-employment tax on income from renting a room in my house?
Generally no. Rental income from renting a room or ADU in your primary residence is passive income reported on Schedule E and is not subject to self-employment tax. SE tax would apply only if you provide substantial hotel-like services (daily cleaning, meals, concierge) — the same Schedule C trigger that applies to full-property Airbnb hosts. Most house hackers providing a furnished room and basic amenities safely file Schedule E with no SE tax.
Does renting part of my home affect the §121 home-sale exclusion?
Partially. The §121 exclusion (up to $250,000/$500,000 of gain for qualifying primary residences) still applies to the owner-occupied portion. However, any depreciation you claimed on the rental portion must be recaptured as ordinary income when you sell — that amount is not excluded under §121. Additionally, if the rented portion was a completely separate unit that you treated as non-residential, a portion of the gain attributable to that unit may not qualify for the exclusion.
Can I use the §280A(g) 14-day rule for a room I rent in my primary residence?
Yes, if you rent the room for 14 or fewer days during the calendar year, the income is completely tax-free under §280A(g) — the Augusta Rule. This applies to a room within your primary residence just as it does to the full home. However, if you exceed 14 rental days, all rental income from that room becomes taxable and you must file Schedule E with the appropriate allocations.
Is there a difference in tax treatment between short-term (Airbnb) and long-term room rentals?
The core allocation rules are the same — rental sq ft ÷ total sq ft determines the deductible percentage regardless of rental duration. The differences: short-term rentals may be subject to the §280A vacation home rules if you personally use the same space heavily; long-term tenants (30+ days) typically don't trigger lodging tax obligations that short-term guests do; and the Airbnb host fee is an additional deductible expense for platform rentals. Otherwise the Schedule E reporting and expense allocation are identical.
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