TurboTax Premier Imposing Occupation Tax on Personal Use Days

Forum|Forum|1 year ago
February 5, 2025
2 replies
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We have a rental in an area that collects an occupancy tax. During 2024 the house was rented for 202 days. We used it for a total of 9 days, primarily to be there for attending to maintenance items (it's far away from our primary residence).

Looking at Line 16 of Schedule E, TurboTax Premier is spreading the total occupancy tax (column a) between Reported on Schedule E (column c) and Allocated to Personal Use (column e) by the ratio of 9/202.

Why would part of the occupation tax be allocated to the personal days? We own the property.

MAK70

You would not be able to deduct the occupational tax for the days designated as personal use. The IRS requires allocation of deductible expenses for any personal use of the property. See Topic no. 415, Renting residential and vacation property.

In your situation, the use may not have been personal, but business use for maintenance of the property, in which case you would not have to prorate the expenses.

DX-houndAuthor

Yes, I understand I can't deduct occupation taxes for the days of personal use, but we're not charged an occupation tax for days we're in the property we own. The problem is that entering the total occupation tax, which was ONLY collected for renters, TurboTax then apportions part of that tax to our personal days. ALL of the occupation tax was collected against renters and none of it should end up in the personal days column where it can't be deducted. Why would we be paying a renter's occupation tax during our stays when we own the place? Perhaps the occupation tax deduction should go somewhere else on Schedule E rather than line 16 or 16b so the total stays in the proper column?

Thanks

AmyC

Employee

The program gives you the option to enter expenses on your own or let the program do it. In this case, choosing to do the math yourself will allow you to make the full amount deductible.

First, look at your Sch E expenses and note the prorated amounts.
Then, go back through the rental
Edit the property profile
Continue to Let Us Calculate Your Expense Deductions, select NO - this will allow you to do the math and enter the deductions
continue through program
Edit expenses
Enter your full occupancy tax and the other prorated amounts.

You clearly understand what needs to be done and where it goes, good job!

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Carl11_2

Employee

Just an FYI:

We used it for a total of 9 days, primarily to be there for attending to maintenance items

Those are not personal use days. Since your primary reason for being there was for turn-around and maintenance, you were not occupying the property for any type of personal use. You were there to perform necessary maintenance and I also suspect for turn-around to prepare the property for the next renter. All expenses incurred during that time, including your reasonable travel costs, are all deductible on the SCH E.