Should I prorate the insurance premium and real estate taxes

Forum|Forum|7 years ago
June 6, 2019
1 reply
18 views

Hello there

I converted my home to rental starting from 4/21/18. I have paid the following

1. Full year property tax of $9355.22 for the period 7/1/18 to 6/30/19 on 10/5/18. So the taxes are for the period where the home was a rental and also was paid after the property was rented out

2. Full year rental insurance premium of $1541 for period 11/13/18 to 11/13/19 on 10/31/18. Again, the insurance was the period where the home was used as a rental and paid after the rental conversion.

Now, can I use the full amounts I paid above when entering the rental expenses for property taxes and insurance premiums? Please help.

TurboTax Premier Windows

Best answer by MinhT1

No, you have to prorate property taxes, insurance and mortgage interest (if any) between the personal use period and the rental period. You have 110 days of personal use and 255 days of rental use. For property taxes and insurance, do not use the period of coverage to prorate, but just use the ratio 110/255.

In TurboTax, when entering the number of days of rental and personal use, only count the days during the rental period. In your case, if the home was rented from 4/21/2018 till the end of the year, use 255 days for rental days and 0 day for personal use.

If you need further help, please add a comment.

MinhT1Answer

Level 15

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G237Author

Level 2

Thanks for the prompt response. I have paid the property taxes for 7/1/17 to 6/30/18 in 2017 tax year. But from what you mentioned, I will be able to fully claim the taxes and the insurance paid in 2018 towards the rental expense for this year.

That being said, I am at a net total loss on my rental property this year where my expenses exceed my income from this rental. Do the rental losses carry over to the following years? Is there any other way I can recognize some of these expenses to reduce my future tax bill?

Thanks again for your help