Hi, I bought a house this year and am renting out 2 of the bedrooms (33% of the house). I was wondering if I did the mortgage tax and property tax correctly - both places

Forum|Forum|7 years ago
June 1, 2019
1 reply
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It asked for my mortgage interest and taxes in both the personal section and in the rental section. I wanted to know how this is supposed to be completed.

TurboTax Premier Online

Carl

Level 11

Nobody here or at TurboTax can see or access your return. But basically, if you work through the program as it's designed and intended to be used, you're fine. You work the rental stuff first. In your case, you indicate that you rent out a part of your home. So you must pay attention to detail. It's important. So screens tell you to enter the entire amount of your expense, and the program will pro-rate it between the rental portion on SCH E and your personal use portion on SCH A. Other screens inform you that *you* have to manually pro-rate, and enter the rental portion only.

So paying attention to detail and reading the small print, really matters. For example, the homeowner's insurance you pay is not deductible for your personal use portion. It's only deductible for the rental portion. If you rent out 33% of your house, then only 33% of that insurance you paid in 2016 is deductible.

So on the "common expenses" screen where you're asked for a number of things, two of those things are insurance and property taxes. The program doesn't tell you on that screen to do anything special. So you enter the total amounts you paid for those two items for the entire year. The program will automatically split the property taxes you paid between SCH E for the rental portion, and SCH A for your personal use portion. Then the program will apply 33% of the insurance you paid to the SCH E only, and nothing to SCH A since you can't deduct property insurance on your personal use part.

After you finish working through that rental and move on, when you get to the "Your Home" section under the Deductions & Credits tab, as you're working through your home, you'll see that some numbers are already filled in that you did not enter. LEAVE THEM exactly as they are and press on to the next item. You'll see that the program has also allocated a part of your 1098 Mortgage Interest already too. So don't change it. In your case, it's *not* supposed to match what's on your 1098. The difference is already reported and claimed on the SCH E.

The above is just an example and not all inclusive. I just want to make sure you have a very basic understanding of this stuff, is all.