How to Enter Tax Deduction for Renting Out a Room in House (Primary Residence)?

Forum|Forum|4 years ago
April 19, 2022
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My primary residence is a 5-bedroom house. I use one room for rental purpose only (no personal use). The room was rented out 120 days in 2021 (not full year bc I couldn't find tenants, but the room was available for rental the entire year). When entering property information in TurboTax, I chose "rent part of the house out". My questions are:

1) In TurboTax, after choosing "rent part of the house", I entered 20% for rental square footage (1 in 5 rooms) and 120 for rental days and 0 for personal use. Is it correct? The room is for rental purpose only throughout the year, though it was only rented out for 120 days.

2) After entering the above information, Turbox Tax divided my total expenses (e.g. mortgage, interest) by 5 (based on the rental square footage) as rental expense. It indicates that the number of rental day doesn't matter as long as there was no personal use of the rented room. Is it correct?

3) Is mortgage interest 100% deductible for primary residence? If so, besides the 20% of mortgage interest reported as rental expense by TurboTax, where is the rest 80% reported in the tax form?

Thank you!

Best answer by AnnetteB6

Question 1 -- The entries you made are correct.

Question 2 -- Yes, it is correct. As long as the room was available to rent all year with no personal use, then you can take a portion of the expenses for the whole year.

Question 3 -- Between Schedule E and Schedule A, the mortgage interest is 100% deductible. 20% will be claimed as a rental expense on Schedule E and the other 80% will be reported on Schedule A for itemized deductions. You should go to the mortgage interest section of Deductions and Credits to be sure that the 80% portion has been reported there. Read the screens in that section carefully because there will be messages on the screen saying whether or not the personal amount of the mortgage interest has already been transferred to Schedule A from Schedule E.

Use these steps to go to the mortgage interest section in Deductions and Credits:

On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where you can type in “mortgage interest” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will give you an option to “Jump to mortgage interest”
Click on the blue “Jump to mortgage interest” link

AnnetteB6Answer

Question 1 -- The entries you made are correct.

Question 2 -- Yes, it is correct. As long as the room was available to rent all year with no personal use, then you can take a portion of the expenses for the whole year.

Use these steps to go to the mortgage interest section in Deductions and Credits:

On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where you can type in “mortgage interest” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will give you an option to “Jump to mortgage interest”
Click on the blue “Jump to mortgage interest” link