Personally, I think you have a SCH C business. I don't know how to deal with that for your specific situation. But assuming you want to report it on SCH E:
You work this through the Rentals & Royalty Income (SCH E) section of the program. Read the screens now, as the small print really does matter, big time. Some screens say select the one that applies. Others say select "ALL" that apply. It matters.
Towards the beginning you'll have a selection for "I rented out part of my home" and you will select that.
Later when asked, you'll enter the square footage of your entire home, and the square footage of the space you rent that is (this is important now) "exclusive to the renter". You'll be asked for lots of other stuff too, which for the most part is self-explanatory. So I'm not going into that here.
When in the expenses section you will have two types of expenses. There's "whole house" expenses, and then there's "rental portion only" expenses. It is NOT common to have expenses for the rental portion only. So chances are you'll have zeros for all that.
Note that there are several things to be aware of when reporting this on SCH E
- You will not pay self-employment taxes on the rental income
- You will not be contributing to your social security account or Medicare. (Which is basically what the SE tax is.)
- You can NOT count the income when figuring the percentage of your income to deposit in a qualified/tax deferred retirement account (including ROTH).
For timeframes, the date of conversion is the last day you used the space for your personal use.
The "in service" date is the first day the space was "available for rent".
"The "number of days rented" includes periods of vacancy between tenants *PROVIDED* you did not use that space for personal use for even one single day while it was vacant.
Number of days of personal use is ZERO provided you did not use it for personal use for one single day *during the period of time the space was classified as rental space.* Days of personal use before you converted that space to rental space, flat out do not count for anything.
