Yes, you should prorate the amounts between Schedule A (for the time you lived there) and Schedule E (for the time you rented it out).
When you enter the date that condo became a rental in TurboTax, the depreciation will be automatically calculated only for the time you rented it.
For all other expenses, you can prorate as follows:
Example: Let's say that you lived in your home Jan 1 - Mar 31 (3 months) and rented it Apr 1 - Dec 31 (9 months). Let's also say that you had Mortgage Interest of $5,000, Real Estate Taxes of $2,000 and Home Owners Insurance of $500. These costs would be allocated as follows:
- Schedule A:
- Mortgage Interest = (3 / 12) x $5,000 = $1,250
- Real Estate Taxes = (3 / 12) x $2,000 = $500
- Home Owners Insurance = $0 (not deductible for personal use property)
- Schedule E:
- Mortgage Interest = (9 / 12) x $5,000 = $3,750
- Real Estate Taxes = (9 / 12) x $2,000 = $1,500
- Home Owners Insurance = (9 / 12) x $500 = $375
Please note: for the time you lived there, you'd only be able to deduct the applicable Mortgage Interest and Real Estate Taxes. You would not be able to deduct that portion of depreciation or condo insurance.
