I have been using TurboTax for 15 plus years now, and this year I get the impression that while they may know tax law, quite a number of the tax experts and turbotax employees participating in this forum really don't know how the program works and what all of it's capabilities are yet.
Now I myself own three rentals and have been a landlord for going on 30 years now. I've been using TurboTax for 18 of those years. So when it comes to reporting your rentals in TurboTax, here's the bottom line.
It is IMMENSELY IMPORTANT that you use the TurboTax program the way it is designed and intended to be used. It is also IMMENSELY IMPORTANT that you read each screen in it's entirety as you work things through. If you do not, and you are not experienced with the program, you *WILL* make mistakes.
So by following the above that means that you will be entering your rental stuff first, well before you get to the personal deductions stuff. Work through the Rental & Royalty Income (SCH E) section of the program and (I can't stress this enough) READ EVERY WORD ON EVERY SCREEN. Depending on your specific and explicit situation the program will ask you if you want to do the splits manually, or let the program do those splits for you. Elect to have the program do the splits for you. So key points.
For the rental expenses, enter the total of all expenses paid for that rental, starting on the first day that rental was "available for rent". Those expenses are 100% deductible with one exception that you have to figure manually *no* *matter* *what*.
The property insurance that you paid in 2019 is not deductible anywhere on your tax return for the period of time the property was not a rental. It is only deductible for the period of time it was a rental. So you'll have to pro-rate the insurance premium you paid in 2019. For example, if you paid $1200 back in june and then converted the property to a rental in Sept and it was "available for rent" on Sept 1, that's 4 months of insurance you can deduct on the SCH E. with 12 months in the year that fraction is 4/12ths, and 4/12ths of $1200 is $400. So you enter $400 in the box that asks you for the insurance.
When you enter the mortgage interest, enter the 1098 *EXACTLY* as printed. Then finish working through the rental section of the program in it's entirety. Then press on with life.
When you get to Deductions & Credits and start the "Your Home" section, remember to read every word on every screen. You will see in black and white that the program will show you the amount of the mortgage interest allocated to your SCH A from the coverted rental. DO NOT ENTER IT AGAIN.
However, if you own the house you lived in upon vacating the rental and you paid mortgage interest on that house in 2019, then you will enter the 1098 for the SECOND house you lived in in 2019 in the "Your Home" section, and that's it.
So what it comes down to is that you will enter each 1098 *EXACTLY* as printed, and you will enter them only once in the program. That's it.
