Question on Primary residence with 1 room rental (Schedule E) and Business (Schedule C) from same home

Forum|Forum|1 year ago
February 4, 2025
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Hi,

I have a question on how to Calculate and provide Mortgage Interest and Property Tax on my primary residence with 1 room for rental (Schedule E) and also running a Day Care business from the same home (Schedule C).

Here is more information about my scenario:

Total Primary Residence Living Area: 3430 Sq Ft.

Daycare business Sq. Ft: 1600 out of 3430 Sq. Ft (Total) can be claimed on Schedule C

Room Rental Square Foot: 230 St. Ft. can be claimed on Schedule-E

Schedule A can have a remaining portion of Mortgage interest and Property Tax for 1600 Sq.Ft.

Total Mortgage Interest on 1098 is US $ 27000

Total Property Tax: US $ 18000

Please help me calculate the Mortgage and property tax amount for Schedul-C, Schedule E, and Schedule-A (personal deductible).

Thank You

Best answer by pk12_2

@idl1i31 is this a test or is it real ?

Assuming real help needed :

Mortgage Interest --27,000

Prop, Tax 18,000

Home ------------------------- Rental ------------------------ Business

Area 1600 ----------------------230 --------------------------------1600

Ratio 0.466 .0671 0,4665

Tax 0.466 X 18000 = 8388 0.0671 X 18000 = 1208 0.4665 x 18000 =8397

Interst 12,582 1809 12595

Does this make sense ?

pk12_2Answer

Employee

@idl1i31 is this a test or is it real ?

Assuming real help needed :

Mortgage Interest --27,000

Prop, Tax 18,000

Home ------------------------- Rental ------------------------ Business

Area 1600 ----------------------230 --------------------------------1600

Ratio 0.466 .0671 0,4665

Tax 0.466 X 18000 = 8388 0.0671 X 18000 = 1208 0.4665 x 18000 =8397

Interst 12,582 1809 12595

Does this make sense ?

idl1i31Author

Yes. it does make sense on a calculator.. Thank You for breaking it up for both property tax and mortgage interest.

Based on that my next question is, how do we enter on each form? B'cos I have received 1 Mortgage interest statement (1098) and 1 property tax statement?

And I get confused about where Turbo tax software does auto calculation based on the square footage provided for each business (rental and daycare). But in the end in Personal deduction section, for some reason (or mistake), it DOUBLES the amount of Mortgage interest and property tax under PERSONAL > Deduction & Credits >

Mortgage Interest, points: 54000

Property Taxes: 36000

How do I correct my mistake and provide the right amount of both Property Tax and Mortgage interest for each form?

Appreciate if your reply..

Thank You

pk12_2

Employee

@idl1i31 ,

In such a case , I would not enter the figures from the 1098 from the lender and the tax statement. ( There used to be a percentage ownership column for Schedule E worksheet that allowed he expenses to be allocated based on ownership percentage. But that also had its limitations. And needed careful checking and editing to get the correct figures.

I would instead forget the automatic allocation and instead enter the actual allocations directly. This way there will be no doubling of the total. However I will keep the records on how I came to those figures.

Another way is to attach backup/ " more information" sheets -- hover over an entry in the forms mode , select the magnifying glass symbol -- now here detail how took the total and allocated the amount. Only the final figure/calculated figure would show on the form --- but you will have a record of how you came to these figures.

Hope this helps.

Is there more I can do for you