See how to enter rental income and expenses below.
TurboTax calculates the net rental income (loss) based on your entries. The rental is reported on Schedule E - IRS.gov Supplemental Income and Loss (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc.)
You report the amount your tenants paid as rental income.
You report the amount from your 1098-Mortgage Interest Statement Box 1 as mortgage interest. Mortgage Principal is not deductible.
Note: If your rental property is located out-of-state, make sure you first set up that state properly in Personal Info. That way, when you do your state taxes, we'll be ready to go.
Now let's enter that rental:
- In TurboTax, search for rentals and then click the "Jump to" link in the search result.
- Answer Yes to the question Did you have any rental or royalty income and expenses?
- Follow the on-screen instructions as you proceed through the rental and royalties section.
- We'll first ask you to enter general information about your rental (description, address, ownership percentage, etc.)
- Eventually, you'll come to the Rental Summary screen which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses.
Tip: Rent is considered income in the year you received it, not the year it applies to. This means that a rent payment for the month of January 2017 collected in December 2016 is reported on your 2016 return.
If you're also filing a nonresident state return to report income from an out-of-state rental property, be sure to complete your nonresident state return before you prepare your resident state return when you get to the State Taxes section.
