You cannot bypass, you should select either of you to move forward. According to the IRS Publication 527, you can use Schedule E for rental income and expenses, however you would have no rental asset (home and land). The cost would be zero for you.
- Generally, if you pay rent for property, you can’t depreciate that property. Usually, only the owner can depreciate it. However, if you make permanent improvements to leased property, you may be able to depreciate the improvements"
You would report the rental income and expenses in the Federal section of TurboTax, then Income and Expenses, then Rental Properties and Royalties. When you set up the property, don't add anything for the cost of it. You should deduct your rental payment as Rent Expense after setting up that expense as an Other Expense. You should use the Premier version of TurboTax.
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