I built an Accessory Dwelling unit in 2015 in my backyard. I used a rehab mortgage to finance the project, so all of the financing is wrapped into my mortgage for my main house. The project finished in November, and we had tenants move in at that time. In addition, part of the ADU is my husband's home studio/office for his music business.

The ADU has rental income and business use of the home. I have a home office in our main house. I am confused about how to report all of this -- do I simply add the square footage of the ADU to our main house because it's all in the same mortgage payment? Or is it a separate space? If it's a separate space, it seems like I need to report interest on the loan, so would I just prorate based on square footage?

Any help will be very appreciated. Thank you!