Question

I have a part vacation part rental property. My income is 8,615 and expenses are 9,065. Why doesn't turbo tax allow to carry forward the diff and forces the diff to 0?

Forum|Forum|4 years ago
March 29, 2022
2 replies
0 views

the software forces the diff to 0 by adjusting down my tax depreciation on property

TurboTax Premier Online

It depends on what your expenses are. Not all expenses are treated the same.

Dividing Expenses between Rental and Personal Use

If you use the dwelling unit for both rental and personal purposes, you generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose. You won't be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, casualty losses, and rental expenses like realtors' fees and advertising costs).

However, you may be able to carry forward some of these rental expenses to the next year, subject to the gross rental income limitation for that year. If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you may still be able to deduct your personal portion of mortgage interest, property taxes, casualty losses, and rental expenses from federally declared disasters on that schedule.

D

dkirsanovAuthor

I already split my expenses between rental and personal and have a decent amount of rental expenses leftover that Turbo Tax is not allowing me to carry forward. It offsets my depreciation to get my net rental income to zero (which is fine) BUT it doesn't show any carry over.

AliciaP1

If your property qualifies as a "home" rather than a "rental property" then you are not allowed to recognize any losses for the year nor are you allowed to carry them forward.

Your property qualifies as a home if your personal use exceeds the greater of:

14 days, or
10% of the total days it is rented to others at a fair rental price

Per the IRS (Publication 527😞

Limit on deductions.

Renting a dwelling unit that is considered a home isn’t a passive activity. Instead, if your rental expenses are more than your rental income, some or all of the excess expenses can’t be used to offset income from other sources. The excess expenses that can’t be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. Any expenses carried forward to the next year will be subject to any limits that apply for that year. This limitation will apply to expenses carried forward to another year even if you don’t use the property as your home for that subsequent year.

@dkirsanov

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D

dkirsanovAuthor

I already split my expenses between rental and personal and have a decent amount of rental expenses leftover that Turbo Tax is not allowing me to carry forward. It offsets my depreciation to get my net rental income to zero (which is fine) BUT it doesn't show any carry over.