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Owner occupied rental property and personal use days

Forum|Forum|4 years ago
March 28, 2022
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I rented out a room in my house for part of the year. I indicated that it is owner occupied rental property. Since I only rented it out for part of the year, I put 187 in days rented, and 178 personal use days. However, Turbo Tax keeps giving me an error and won't let me submit saying personal use days should be zero. Is that correct? Should I put 0 personal use days even though I only rented it out for part of the year?

TurboTax Premier Online

Best answer by PattiF

Check the option that "I rent out a part of my home", and select "No, this property was not rented all year", and do not put any number in the box for personal days.

Mortgage interest and property taxes are divided between personal (Schedule A, itemized deductions) and rental use (Schedule E) proportional to the number of days used for each and square footage rented.

Your formula is as follows: square footage of rental space/ total square footage of house times days rented/365 to be allocated as a rental expense

For instance, if you have $10,000 in mortgage interest and rent 25% of your floor space for 6 months, multiply 10000 x .25 x .5 = $1250 to allocate as a rental expenses. the balance as a Schedule A, itemized deduction.

So, you will enter a portion of mortgage interest and property taxes in both areas.

To enter personal mortgage interest and property taxes:

Type in mortgage interest in the search box, at the top right of your screen
Hit the Enter key
Click jump to mortgage interest in the search results
Follow the prompts and online instructions
To enter rental expenses, type in rental property and follow the above instructions

P

PattiFAnswer

Check the option that "I rent out a part of my home", and select "No, this property was not rented all year", and do not put any number in the box for personal days.

Mortgage interest and property taxes are divided between personal (Schedule A, itemized deductions) and rental use (Schedule E) proportional to the number of days used for each and square footage rented.

Your formula is as follows: square footage of rental space/ total square footage of house times days rented/365 to be allocated as a rental expense

For instance, if you have $10,000 in mortgage interest and rent 25% of your floor space for 6 months, multiply 10000 x .25 x .5 = $1250 to allocate as a rental expenses. the balance as a Schedule A, itemized deduction.

So, you will enter a portion of mortgage interest and property taxes in both areas.

To enter personal mortgage interest and property taxes:

Type in mortgage interest in the search box, at the top right of your screen
Hit the Enter key
Click jump to mortgage interest in the search results
Follow the prompts and online instructions
To enter rental expenses, type in rental property and follow the above instructions

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A

AmeliesUncle

TurboTax can't double-prorate things. But first let's figure out your situation.

You said it was rented for part of the year. What about the other part? Was it available for rent? Was it used for personal purposes? Something else?

C

carmencitalirioAuthor

It's my home, so I was just living in it. It was available for rent for a few months before I found a renter.

A

AmeliesUncle

So it was not available for rent all year? Was this the first year it became available for rent? Will you be renting it out in 2022?

Carl11_2

Employee

A few things to note:

Three items "must" be selected on the Property Profile.

- 2021 was the first year I rented this property.

- I rent out a part of my home.

- I converted this property from personal use to a rental in 2021

On "was this property rented all year?" select YES.

On "let us calculate your expense deductions for you" select NO. (The program does not and can not correctly allocate everything. So you should do it manually.)

Once you have finished the rental section completely, double-check that the depreciation is correct. My bet is, it won't be.

See IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf and use the worksheet that starts on page 37. The table that applies is Table A-6 on page 72.