I'm amending 2019 taxes. I began renting out a room in my home in July 2019, and she moved out at the very beginning of April 2020. We shared common areas. It is the only house I owned in 2019, thus I consider it to have been my principle residence. Even though I began attending college full-time in a neighboring state about mid-July, I regularly commuted back to the house for weekends, days off school, August school break, Thanksgiving break, and half of December in 2019. In 2020, I was only enrolled in school until March 2020, but it was all online, thus largely from the same house. My two sons were full-time, out-of-state students, but it was also their principle residence, and they came back in July for their school break, and again for holiday/winter breaks. Thus, I consider it my principle residence for 2019, and it was my only residence from 2003 through approximately mid-July 2019. I only just found confirmation from an email of exactly when the other tenant moved in, and also only just recalled my sons were both living in the house during their school break in July, thus I need to change the days allocated to rental versus personal use. Also, the room I rented out was not the tenant's primary residence. She owned and lived in a house with her husband in a neighboring county, and on a consistent, every-other-week basis alternated spending 4 nights per week at her own home versus 3 nights per week at her home, but also spent additional other days at her home when off work, such as for Federal holidays and sick or personal time off work. I'm concerned because the software for schedule E will not allow me the number of rental days and personal use days to total more than 365 days, yet we were both living in the house at the same time, although I did not use her bedroom once she moved in. The tax forms then display my principle residence as a "vacation" home. How do I change that? Also, won't this result in "non-qualified use days" when I go to sell my house which will then reduce what can be excluded for capital gains which does not seem fair as it was my principle residence? Also, when getting help over the phone, the "advisor" insisted it was a "business" and not "not-for-profit," and not just for investment, even though I read in multiple places usually this type of situation would be considered "passive investment income," and it was an investment rental and not a business rental. However, the 1040X and schedule E forms make it appear as a business in my opinion.
