How do I split expenses when I live in one unit of a duplex?

Use a reasonable method, such as square footage, to divide whole-building costs between the rental and personal parts. Costs only for the rented unit are fully deductible.

Can I depreciate the whole duplex?

No. Only the rented share of the building is depreciated, and land is never depreciated.

Live in Your Duplex: Split the Expenses

Divide the expenses that cover the whole building between your rental part and your personal part, using a reasonable method such as square footage or number of rooms. Costs that belong only to the rented unit are fully deductible on Schedule E, costs of your own unit are personal, and depreciation applies only to the rented share of the building.

The rule: treat it as two properties

IRS Publication 527 says that when you rent part of your property, you must divide certain expenses between the part used for rental and the part used for personal purposes, as though you had two separate properties. It allows any reasonable method, and gives the number of rooms and the square footage as examples, as long as the rooms are about the same size. See IRS Publication 527.

That is the whole idea. The rest of this post is how to apply it to each cost and how to keep the records so it is the same answer every year.

Sort every cost into one of three buckets

Bucket	Examples	Treatment
Only the rented unit	Repairs in the tenant's unit, tenant turnover painting, ads for the unit	Fully deductible on Schedule E
Only your unit	Your own repairs, your own furniture and appliances	Personal, not deductible
The whole building	Mortgage interest, property tax, insurance, roof, water and trash on one meter	Split by your chosen method

The personal share of mortgage interest and property tax is not lost. It may still be an itemized deduction on Schedule A, subject to its own limits. Ask your preparer whether it helps you.

A worked example

Example a made-up duplex has two units of 1,000 square feet each, so the rented unit is 1,000 divided by 2,000, which is 50% of the building. The owner pays $9,000 of mortgage interest, $6,000 of property tax, $2,400 of insurance and $1,200 for water and trash on one bill. The owner also pays $800 to repaint the rented unit and $300 to fix a faucet in the owner's own unit. Rent is $1,300 a month, $15,600 for the year. The building cost $300,000, of which $60,000 is land.

Item	Total	Rental share
Mortgage interest	$9,000	$4,500
Property tax	$6,000	$3,000
Insurance	$2,400	$1,200
Water and trash	$1,200	$600
Repaint rented unit	$800	$800
Faucet, owner's unit	$300	$0
Cash expenses on Schedule E		$10,100

Check: $4,500 plus $3,000 plus $1,200 plus $600 plus $800 is $10,100.

For depreciation, only the building is depreciated, not the land. The building is $300,000 less $60,000 of land, which is $240,000. The rented half is $120,000. Over 27.5 years that is about $4,364 for a full year ($120,000 divided by 27.5, which is $4,363.64). The first and last years are smaller under the IRS tables, so this is a guide.

Net rental income for a full year is $15,600 minus $10,100 minus $4,364, which is $1,136. The owner's cash profit is higher, $5,500, because depreciation is not a cash cost. It lowers taxable income, and it reduces basis, which comes back at sale. See depreciation recapture.

Choosing and keeping a method

Square footage is usually the simplest and the easiest to defend. Measure once and write down the numbers.
Common areas such as a shared hallway or yard are often split by the same percentage. Use one method for the whole building.
Do not change the percentage from year to year without a reason, like a changed use or an added room.
If a utility has separate meters, use them. The meter is better evidence than any ratio.

If the building has more than two units, the same math holds: the share is the units you rent divided by all units, or the rented square feet over the total. For a single room rented in your home, see the home office and similar deductions for how personal-use space is tracked.

How to set up your books

Open a separate bank account for the rental. Rent goes in, rental costs go out, and your own costs stay outside.
For whole-building bills, pay the full amount from your personal account or the rental account, and record only the rental share as the rental expense. If the rental account pays the full bill, book the personal share as an owner draw, as in owner draws vs distributions.
Keep a one-page note with the percentage, how you measured it, and the date.
Save loan, tax and insurance statements, which show the whole-building totals.

A mix of personal and rental money in one account is the problem described in commingling funds in a rental LLC. A clean split saves hours at tax time.

What changes when you sell

When you sell, the sale is divided into a personal part and a rental part. The part you lived in may qualify for the home sale exclusion if you meet the use and ownership tests, and the rented part is a rental sale. The depreciation on the rented part is not excluded. Details are in IRS Publication 523 and in renting out a former home. Keep your split percentage and each year's depreciation; you will need both.

How DoorKeeping handles it

In DoorKeeping each property has its own books, so the rental share of the building's bills can be recorded as expenses that map to Schedule E lines, with the personal share kept apart. Ask Claude or ChatGPT to split a bill by your percentage and propose the entries, then approve them with one tap. Rent stays in your own bank: tenants pay you directly and DoorKeeping never holds it. DoorKeeping does not give tax advice, so confirm your method and the Schedule A treatment with your tax preparer.

Sources

IRS, Publication 527, Residential Rental Property (2025), read Oct 30, 2026
IRS, Publication 523, Selling Your Home, read Oct 30, 2026
IRS, Publication 946, How To Depreciate Property, read Oct 30, 2026

Questions

How do I split expenses when I live in one unit of a duplex?: Use a reasonable method, such as square footage, to divide whole-building costs between the rental and personal parts. Costs only for the rented unit are fully deductible.
Can I depreciate the whole duplex?: No. Only the rented share of the building is depreciated, and land is never depreciated.
What happens to my share of mortgage interest and property tax?: The personal share may be an itemized deduction on Schedule A, subject to its limits. Ask your preparer.