Yes, you should report the condo rental on Schedule E (Form 1040) even if you have a loss. Here are the key points to consider:
- Report Rental Income and Prorated Expenses: Report the rental income and prorate the expenses based on the rental period (2.5 months out of 12 months). This includes repairs, upgrades, and new furniture/appliance
- Depreciation: Upgrades and furniture are usually depreciated over several years and are not fully deductible in one year
- Rental Losses: Rental losses cannot exceed rental gains due to personal use. However, even with a loss, rental activity should be reported
- To report rental income in TurboTax follow instructions here.
For more detailed information, you can refer to the IRS guidelines on reporting rental income and expenses on Schedule E
