property tax refund received that was partially deducted in prior year

[jbairdmn]

I received a refund of real estate taxes in 2023 for tax years 2022 and 2021. I did not itemize deductions in either of those years, but I did take a deduction on schedule e for a portion of those taxes due to renting out the property for part of the year. Therefore, I believe that the portion of the refund that relates to the amount previously deducted should be taxable this year as other income. However, when I enter the tax refund in Turbotax, and indicate that I did not itemize deductions, it defaults to none of the refund being taxable. I cannot see how to override this for the amounts that were deducted as part of schedule e expenses. I can easily calculate how much of the refund should be taxable, but how do I enter it in turbotax since the normal entry for state and local tax refunds doesn't take into account schedule e deductions?

[PatriciaV]

Enter only the amount that you claimed in prior years and don't check the box for itemizing. This will allow the program to report the appropriate amount of taxable income this year. 

[jbairdmn]

Thanks, that was very helpful. I had to keep trying to override the system after telling it I did not take the standard deduction, because I had imported my prior year return so the system knew I had taken the standard deduction. After entering some other information and getting pushback from the system, I finally got to a screen where I could just insist that the amount was taxable so that it would count the refund correctly.