The mortgage interest for your primary home that was converted to a rental property will be split between Schedule A and Schedule E, based on the number of months it was used as a home or rental. You will only enter the mortgage information one time, on Schedule E (Rental Income and Expenses).
When you are entering the information for your rental income and expenses, be sure to indicate that you converted your home to a rental. This will allow you to include information about when it was converted to a rental property.
Then, include the mortgage interest for the converted home as you work through the rental income and expenses section. This will report the rental mortgage interest on Schedule E. TurboTax will prorate the amount. The personal portion of the mortgage interest will be reported on Schedule A automatically. You will not need to enter it again when you are going through the itemized deductions section of your return.
To go directly to the section of the tax return to enter information about rental income and expenses, use these steps:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
- This opens a box where you can type in “rental income and expenses” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
- The search results will give you an option to “Jump to rental income and expenses”
- Click on the blue “Jump to rental income and expenses” link and enter your information
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