Business use % when renting a room in a house

No, he can deduct the proportion of his room used on a regular basis for storage of inventory.

I'm not aware of any specific formula for this kind of situation, though there may be one. One approach would be (assuming that all the rented rooms are about the same size) to divide the entire square footage of the house by the number of renters sharing the house. Then divide that into the square footage used for storage.

Here is how I would do it assuming that the t/p is only storing the inventory in a space specifically identified for storage. E.g., he stores the stuff along an empty five foot wall and the inventory is four feet deep (20 sq ft of inventory space) and no personal belongs are stored in that area. This then becomes the numerator in the space equation.

The denominator in the equation is the area of the room he rents plus his share of the common area of the home.

E.g., he pays rent to occupy a room that is 150 sq. feet. His dedicated inventory space takes up 20 sq. feet of the room. There are three people occupying the home. The common are is 1050 sq. feet. His total area of the home he occupies is 350 + 150 = 500 sq. ft. 20/500 = 4%. That's the percentage of rent he can deduct.

I wonder if it makes a difference whether he lives in the rented room or not. It's not a dwelling unit. The OP was careful to only state "personal use", not "primary residence".

Sorry, I wasn't trying to carefully avoid saying it was the taxpayer's dwelling unit while implying it was. The room is in fact the taxpayer's dwelling. I should have said so clearly.

Thanks everyone for your analyses.

Lee

I think you're missing my point. A room is not dwelling unit unless it includes bath, bed, and kitchen facilities. Usually someone who rents only a room also shares use of common areas such as the bathroom and kitchen.