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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.

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2 Replies

entering expenses on Sch E when rental property adjoins personal home

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. 

entering expenses on Sch E when rental property adjoins personal home

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.

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