- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Investors & landlords
If you are intending to never rent it again, that is a possible method, but it is sort of a weird area.
It if was 100% rental then converted to 100% rental that is expected to be a rental for a year or more, Carl is correct. But if the rental period (or personal period) is expected to be less than a year, then you enter the days.
So if it is not to be rented within a year, that is where it ends up in a weird area because you sort-of meet both scenarios (rental was expected to be less than 1 year which means so you should do it the way I told you, BUT now if personal is expected to be now over 1 year which means the way that Carl said is correct). Realistically, either method can work *IF* you enter the information correctly (which can be quite confusing).
If you do it the way Carl said, then you need to manually calculate and enter the mortgage interest, taxes, insurance, and utilities for that 5 month period. Then manually calculate and enter the 7 months for personal mortgage interest and taxes. If you do it the way I said, just enter the full year amounts in the rental section and the program will divide it.
One note: If you are NOT intending to rent it again, you probably should NOT enter depreciation, as that does not apply for items that are "placed in service" and "taken out of service" in the same year. But if you intend to rent it again next year, depreciation is appropriate (actually, it is required).