Question

Should I enter the full amount of property taxes, mortgage interest, expenses in rental expense or the prorated amount for a rental that I used also for personal use?

Forum|Forum|5 years ago
March 28, 2021
1 reply
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I know the IRS rules, but I don't understand if Turbotax does the proration calculation, based on number of days rented/personal use that I already entered.

TurboTax Premier Online

Carl11_2

Employee

For your situation, you really need more clarification from the program itself, so that you make correct selections and enter correct data. Without that clarification, it's quite easy to make a mistake and not even realize you've done so. Here's the clarification. Work it back through to make sure your data is entered correctly, using the clarified guidance below. If you need further help, please let me know if 2020 is your first year renting the property out. It matters, so that I don't give you incorrect or inaccurate information.

Rental Property Dates & Numbers That Matter.

Date of Conversion - If this was your primary residence or 2^nd home before, then this date is the day AFTER you moved out, or the date you decided to lease the property – whichever is later.
In Service Date - This is the date a renter "could" have moved in. Usually, this date is the day you put the FOR RENT sign in the front yard.
Number of days Rented - the day count for this starts from the first day a renter "could" have moved in. That should be your "in service" date if you were asked for that. Vacant periods between renters count also PROVIDED you did not live in the house (or use the rented portion of house for personal use) for one single day, for any type of personal pleasure use during said period of vacancy.
Days of Personal Use - This number will be a big fat ZERO. Read the screen. It's asking for the number of days you lived in the property (or used the rented portion for personal use) AFTER you converted it to a rental. I seriously doubt (though it is possible) that you lived in the house (or space, if renting a part of your home) as your primary residence, 2nd home, or any other personal use reasons after you converted it to a rental.
Business Use Percentage. 100%. I'll put that in words so there's no doubt I didn't make a typo here. One Hundred Percent. After you converted this property (or space) to rental use, it was one hundred percent business use. What you used it for prior to the date of conversion doesn't count.

Y

yoyo63Author

From your response, it seems you don't understand my question. However, in answer to your direct question, 2020 is not the first year I have used my vacation home as both a rental and personal uses. My biggest question is about how TurboTax apportions property taxes, and where and how I enter property taxes paid on this vacation home rental and on my primary residence, which is fully paid off, therefore, I have no 1098 form for my primary residence. Currently, TurboTax is showing more property tax than what I paid in total, apparently by double counting the portion attributable to my rental property. But I see no place to enter the portion of property taxes attributable to person use of my vacation home.

Carl11_2

Employee

From your response, it seems you don't understand my question.

No argument there.

TurboTax is showing more property tax than what I paid in total, apparently by double counting the portion attributable to my rental property.

My assumption here is that it's apportioning the correct amount on the SCH E, but applying the entire amount on SCH A. Thus, "double counting" the rental portion.

- From my testing a few weeks ago of different scenarios, it seems that the program is not treating the "property tax" expense entered in the rental expenses section, separately and correctly as it should from other expenses entered in that section. In my scenario with 50% business use and 50% personal use and a property tax of $1000, it was correctly attributing $500 to the SCH E, just like it did for all other expenses. But then it was attributing the full $1000 to SCH A. The only way I could get things right, was to do the splits manually.

I notified the Devs of this issue about 2 weeks or more ago, and at their request sent them my testing file. Haven't heard anything since, and from what I can tell in the latest update I installed 2 days ago, the issue is not fixed.

Also note that typically the devs will not respond to update requests on an issue. If they did that for every update request, then they'd never have any time to actually address the issue. So hopefully the next update will take care it. Won't know until the update comes out.