Rental income

Forum|Forum|5 years ago
March 30, 2021
3 replies
11 views

We own a rental home here in our town. We are paying a mortgage on this home so when we get our rent payment, we have to also pay the mortgage. Turbotax seems to be counting our rent payments as pure income and it's saying we owe more taxes. Isn't there somewhere to put how much we are still paying on the home loan versus what we are getting in rent? We are renting to family so we are only clearing $200 a month after we pay the mortgage. Thanks for some info regarding this - it's been very confusing.

ColeenD3

Level 15

No only is your mortgage deductible, but so are your other expenses, if this is a for-profit rental. If you there is only a $200 profit over the interest amount, are you renting at a reduced rate. Are you charging this family full rental value?

If this is not-for-profit, you can deduct your mortgage interest and property taxes on Schedule A.

If this is for profit, enter all your expenses right on Schedule E. You can also depreciate the house. Expenses and Depreciation sections are immediately following the entry of income.

adconnetAuthor

Level 2

On our 2020 schedule E, we have nothing for line 18. How does that number get generated?

DawnC

Level 15

Line 18 is for depreciation and depletion. The rental depreciation is calculated when you enter the rental assets. When you start out in the rental section, you enter information about the property, and then you have to enter all of your rental assets, the home or unit, and any additions you have added.

You need to enter your rental property as an asset under the asset section of rental properties. At some point, you'll come across the Rental Summary screen. Select Start next to Asset/Depreciation and follow the onscreen instructions. We'll figure out which depreciation method works best in your favor.

How do I handle capital improvements and depreciation for my rental?

Where do I enter income and expenses from a rental property? After you do this, proceed to the Assets section and enter the properties there.