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How do I clarify depreciation amount when I rented out a room in my home for nine months and turbotax does not allow me clarify that it was only 25% of the house?
Am I supposed to depreciate the entire home even though I only rented a room? If I plug in the numbers as Turbotax instructs then that is what happens.
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You don't declare any amount. The program does that for you based on the data you enter. Some of the things that matter are the square footage of space that is "exclusive" to the renter, and number of months that space was "in service" as such. You should be working this through the Rental Income & Expenses (SCH E) section of the program. On one of the screens near the beginning of that section, make sure you selected the option for "I rent out part of my home" and work it through from there. The program figures your allowed depreciation based on that, and other things too, such as your MAGI and the such.
Understand also that the rental space you are declaring (25% seems a bit high to me) is that space that is "exclusive" to the renter. None of the common area counts. For example, if you live in a 2BR/2BA house, where you occupy the master bedroom and the master bath is only accessible from that bedroom, then obviously that's not rental space.
But if the 2nd bath is across the hallway from the room that you are renting out, that 2nd bath is not "exclusive" to the renter. It's accessible by your guests visiting you for example. So the floor space of that 2nd bath can not be included in your percentage of rental space.
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I actually like the desktop version better, because it's much easier to navigate, and easier to start over. To start over, close all programs and then delete the .tax2016 file in the documents\turbotax directory. Then fire up the program again, and it's as if you just installed it for the first time.
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- Screen titled "What type of rental is this?" select Single Family
- Screen titled "Do any of these situations apply to this property?" select both "I rent out a part of my home" *AND* select "I converted this property from personal use to a rental in 2016"
- On screen "Was this property rented all of 2016?" Select NO.
Then enter the number of days it was rented, with you day count starting from the first day the first renter moved it, and don't stop counting days until you get to Dec 31, 2016. I am assuming you started renting in Apr 2016, and it continued through the rest of the year. Periods of time between renters DO count for days rented, *Provided* you did not use that space for personal use for one single day between renters.
For "number of days of personal use" enter a big, bit, round, circular ZERO. Read the screen.....all of it. It's asking for the number of days you lived in the property or used the rented space *FOR* *PERSONAL* *USE* *AFTER* you converted it to a rental. WHile possible, I doubt you did. What you used the space for, prior to converting it to a rental does not count for jack squat.
Now when you get to the screen that wants percentage, you must get this right, and be able to prove it, should you ever get audited in the future. (If you put 25%, then if I were an IRS agent reviewing your taxes, I'd flag you for audit in a heartbeat.)
If you can, give me your state and city/county and I'll show you how to get a percentage you can "prove" and that will stand up to scrutiny should you ever have the unfortunate experience of an audit.