ADU Short Term Rental Schedule E mortgage and interest

Forum|Forum|2 years ago
February 27, 2024
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We built an fully detached ADU behind our primary residence in 2022 and started renting it through airbnb in 2023. Should I enter real estate taxes, mortgage interest, and insurance in schedule E, even though it's being entered into the deductions section later? Does TurboTax know to split these out or should I do something like a square footage calculation since the ADU makes up 26% of the total square footage of the two properties or should I just enter these values in one place and skip the other?

Thanks!

mglauner

You could do it either way.

Calculate the 26% on your own and enter your Rental Expenses.

Or, in the Property Profile section, enter your Business Use % as 26% and TurboTax will apply that to your Rental Expenses like Mortgage Interest, Property Tax, Insurance, etc.

If you're using TurboTax Desktop, you can adjust any expenses on Schedule E that would apply 100% to the rental, rather than the 26%.

@aduguy