Yes, TurboTax will walk you through the necessary steps to establish your rental property. The only thing to change is your current new home address. Your former primary residence, now converted to a rental property, will be reported as rental income.
- How do I enter my rental income and expenses?
- There will be questions about your actual purchase date, select this home was converted from personal to rental and a date will be requested for the date you started the rental activity (placed in service for rent).
Before you begin the entry here are a few details to help. Calculate the cost of your home, including any capital improvements over the years. Next use your tax assessment to arrive at the percentage of building versus land. You will need both figures. The home will be an asset.
- The tax law requires the lesser of fair market value (FMV) or cost on the date of conversion to use as your cost basis for your rental home. Generally real estate increases in value so it's likely your actual cost will be less.
- For such things as appliances, the FMV would be the cost to depreciate as another asset. Be sure to remove any cost for appliances from the main house cost calculated above.
Capital improvements become part of the cost basis of the investment property and the combined total will be the depreciable rental asset. The land value must be separated out because it will always be an appreciable asset under the tax law. TurboTax will ask you the land value when you begin your rental activity in 2024.
Utilities, Insurance, real estate taxes, interest, etc: Costs you incur while the home is being rented. TurboTax will ask for each expense you select.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
