Carl
Level 15

Investors & landlords

On the 2017 amended return, you personally will have to manually split the mortgage interest for the year between SCH E for the time the property was classified as a rental, and the SCH A for the time the property was "NOT" classified as a rental. 

Depending on your selection, you more than likely also have to manually split the property taxes.

For the property insurance, you have to prorate it on the SCH E. The property insurance is "NOT" deductible at all for the period it time the property was "NOT" classified as a rental.

 

Clarification for the property insurance and taxes.

Two things that do not matter for each:

1) It "does not matter" when it 2019 the insurance and property taxes were paid - so long as they were actually paid in 2019.

2) It "does not matter" the coverage period paid for with you paid those property taxes and insurance in 2019. For the sake of simplicity, it's treated "as if" insurance and taxes were paid for the period of Jan 1 - Dec 31 of the tax year.

 

Remember, when you amend the 2018 tax return you will have to manually enter the "prior years depreciation already taken" because the number there that was imported from the original 2017 return will be wrong.

 

can I mail 2017 and 2018 1040-X at the same time (in different envelopes)?

Yes you can. However, if I were in your shoes I would mail the 2017 return first then wait a week and mail the 2018 return. As it stands right now the IRS is not processing any mailed returns. So I'd mail the amended returns a week apart so that the 2017 return will have a significantly better chance of being processed before the 2018 amended return is processed. I would fully expect that once the IRS starts processing paper returns, they'll process them first in - first out.