- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
It depends. Let's break this down so we can ensure this gets reported correctly.
- First report the rental information. This will ensure that the mortgage interest will be correctly reported and allocated between the rental and the time it was a residence to you.
- Go to federal>wages and income>Rentals, Royalties, and Farm>Rental Properties and Royalties (Sch E)>start or revisit
- Complete the informational section first. There will be a question that asks if this was your residence in the past. Here you will say yes.
- There will be a screen that asks if you rented this all year round. Here is where you will say you did not rent this for the full year. Based on this answer, the program asks how many days you use this for personal use and how many days did you rent it. An FYI, 171 rental days elapsed between 7/13 - 12/31. That leaves 194 personal use days.
- What you enter here determines the ratio on how your mortgage interest and property taxes are allocated between the rental and your personal residence.
- There will be a entry you will need to make regarding original purchase price, available date (date it became a rental), and the original purchase date. This is used to prorate the mortgage expenses and property value between your residence and rental date.
- Next it will ask the fair market value of your rental when rented. If you don't know, use the cost on the original purchase date.
- Then as you complete the profile summary, in the end it will tell you what the rental will be depreciated by over the next 27.5 years.
- Now you will enter your rental income and expenses. When you list your mortgage interest and property taxes, be sure you record the full value of the mortgage interest and property tax. Turbo Tax will automatically prorate your mortgage interest and property tax between the rental and the time you used your home for personal use. These expenses will appear on Schedule A and Schedule E properly allocated.
Now let's report the mortgage interest on your primary residence that you currently occupy.
- Go to federal taxes>deductions and credits>your home>mortgage interest ....
- When you open up the first screen, there should be an entry listed from where you recorded it in the rental section.
- Select add a lender and report the second home.
- Complete the section reporting your second home.
Now if all of this is reported correctly, your mortgage interest should be correctly accounted for between your Schedule A and Schedule E.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
**Mark the post that answers your question by clicking on "Mark as Best Answer"
‎February 14, 2023
3:54 PM
335 Views