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Level 2
posted Jan 21, 2024 8:23:00 PM

entering expenses on Sch E when rental property adjoins personal home

I declare rental income from an apartment that adjoins my personal home (sometimes called a granny flat or mother-in-law unit). Some of the expenses for the rental such as property tax and insurance are easily figured since the apartment is twenty-five percent of the square footage of the entire property – TurboTax requires that you enter the expense for the entire property after which it multiplies by 0.25 to get the deductible amount.  However, this year I had to repair some plumbing that serves only the apartment so I want to deduct one hundred per cent of the cost, not twenty-five percent, and I cannot figure a way to do this on TT.  I would be grateful for help and advice.

0 2 757
2 Replies
Level 15
Jan 22, 2024 4:59:04 AM

You should NOT let the program do the prorations for you.  You should prorate the common expenses yourself.  There should be NO personal use days listed.  The rental is 100% a rental not 25% of the personal residence ... you must think of this as 2 separate properties for income tax purposes otherwise you will get put into the vacation home rules that do not apply to your situation. 

Level 2
Jan 22, 2024 7:04:29 AM

Thanks but the proration seems to be based on square footage, not days of occupancy:  I entered that the unit was rented 100% of the year elsewhere.  The question is how to override the TT default entries on Sch E.