How to enter rent-a-room "vacation home" rental expenses?

[puravidapto]

In a discussion on another forum, TaxProTalk, the consensus is that renting out a room should adhere to the vacation home rule. I'm trying to understand how to input this data accurately.

Intuit provides guidance on entering data for a genuine vacation home here. For shared expenses, they advise entering values in the "indirect" field to apply the vacation home rule, using the formula:

Business percentage = days rented / (days rented + days personal use)

However, this doesn't seem appropriate for a "rented room" scenario. For instance, if you rent out a room for six months while residing there the entire year, you'd have 183 rented days versus 365 personal use days. This results in a business percentage of 1/3 as computed by the software, which isn't logical.

One workaround I've considered is to prorate the exact expenses by both time and space ratios, then multiply the amount by three (for above example). Since the software divides the indirect method input by three, this would yield the correct final amount. However, this approach feels more like forcing a square peg into a round hole.

I'm seeking a more intuitive solution. If you believe that the "rented room" scenario shouldn't adhere to the vacation home rule, I'd appreciate your perspective on that as well. Thank you.

[Terry53029]

In the past I have treated a rented room in a persons home as square footage of room rented at 100% IE: 10'x12' = 120 sq foot rented at 100% (home owner has zero use of room) No vacation home rules. Schedule E. Asset would be a percent of total home size divided by 120 sq ft. Expenses indirect or 100% if for room only. 

[puravidapto]

---

@Terry53029 wrote:

In the past I have treated a rented room in a persons home as square footage of room rented at 100% IE: 10'x12' = 120 sq foot rented at 100% (home owner has zero use of room) No vacation home rules. Schedule E. Asset would be a percent of total home size divided by 120 sq ft. Expenses indirect or 100% if for room only. 

---

Terry, I know we can do that technically, but I am afraid not legally. I myself do not like the complexity but there were court cases that does not allow alternative explanations as I would like.

- EXPENSES OF RENTING BEDROOMS IN PRIMARY RESIDENCE IS LIMITED TO GROSS RENTAL INCOME.
- no deduction is allowed "with respect to the use of a dwelling unit which is used by the taxpayer du...