Landlord Rents back yard

[Max W]

Client is owns a house with 4 apartments.  One is his residence and the other 3 are rented out.  Last year he rented the back yard on 4 separate occasions, a couple of wedding and 2 parties.  His income was $1500.   Not sure how to handle this.  My idea is to pro-rate the usage and apply it to the M.I. and Prop. Tax.  It would give him a deduction of $270.   My concern is for now and the future as he is very aggressive and might be renting the yard every weekend, for 1 or 2 days.

TIA

[DANRVAN]

Is the yard normally used personally or is it also available to the apartment renters and related interest and property taxes deducted on Schedule E?

 

[Max W]

It is normally common use and int. & taxes Are deducted on Sch E.  Four days rental of the yard would be 1.1%.  As I say, not really concerned about LY, but now and the future.

[ILLMAS]

I will be more worried about having the proper insurance if I was the TP, bring this up to your client and parties will probably stop ASAP.

[DANRVAN]

6 hours ago, Max W said:

It is normally common use and int. & taxes Are deducted on Sch E

If you are already deducting the expenses then it might be immaterial to make a minor allocation.

[Abby Normal]

2 hours ago, ILLMAS said:

I will be more worried about having the proper insurance if I was the TP, bring this up to your client and parties will probably stop ASAP.

And he may need some permit or zoning allowance.

If I was a tenant, I might not renew my lease if loud parties were going on all the time. I'd be checking my lease for 'peaceful enjoyment' clauses.

[Lee B]

The back yard must be fairly nice if he can rent it for parties and weddings, is he also providing services which would put it on Schedule C.

After all you can't just rent a backyard with only grass, bushes and trees?