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Vacation rental problem in Turbotax

Forum|Forum|4 years ago
March 29, 2022
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I am reporting rental income on our vacation home for the first time. I am itemizing my deductions. I'm using Turbotax Desktop. Turbotax seems to be recording information incorrectly. I entered my 1098s (there were two because of a refinance) for the vacation home with the amounts for real estate taxes and mortgage interest. I then completed the Schedule E for the rental property, providing Turbotax with rental days and personal use days as requested. When I looked at the final results, it appears that two things are wrong:

1. The total mortgage interest deduction shown on the Deductions & Credits summary page includes the totals from the two 1098s plus the personal use share as calculated on Schedule E. That seems to overstate my interest deduction by the rental use share of the mortgage interest.

2. The total real estate tax shown on the Deductions & Credits summary page suffers from the same problem, again adding the personal use share as calculated on Schedule E to the total, thus overstating by the amount of the rental use share.

Looking at Schedule A in the Forms confirms these duplicate recordings. Unless I'm misunderstanding the rules, this is an error in my favor, but it seems to be an obvious error that would be picked up in the IRS automated systems and I will have to deal with it later.

Any advice appreciated.

Best answer by AmyC

I feel sure that your Sch E is not correct since it is pulling over what you say should be the rental amounts from Sch E to Sch A. I also feel that you entered rental information in the Sch A area. A common first timer mistake.

Delete the 1098 forms and property tax that you entered for itemized deductions that relate to the rental. All forms related to the rental must be entered on Sch E only. You are correct, you only get one deduction, no double dipping.

There may be a crossover if it was your main home that you turned into a rental. Then the portion related to your main home goes on Sch A while the rental period goes on Sch E. None of the Sch E portion belongs on Sch A.

Great job catching the mistake.

AmyCAnswer

Employee

I feel sure that your Sch E is not correct since it is pulling over what you say should be the rental amounts from Sch E to Sch A. I also feel that you entered rental information in the Sch A area. A common first timer mistake.

Delete the 1098 forms and property tax that you entered for itemized deductions that relate to the rental. All forms related to the rental must be entered on Sch E only. You are correct, you only get one deduction, no double dipping.

There may be a crossover if it was your main home that you turned into a rental. Then the portion related to your main home goes on Sch A while the rental period goes on Sch E. None of the Sch E portion belongs on Sch A.

Great job catching the mistake.

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N

normttAuthor

Thanks for your clarification. It allowed me to finish my return. I still think that Turbotax could have included a simple reminder about double counting in the step by step process.