- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Investors & landlords
Before we get to your actual question, let's check if you did this part correctly ... was the apartment converted to 100% rental, or did it go back and forth between personal and rental use? If it was converted to 100% rental use, you need to enter ZERO personal days. If you read the screen carefully, it says you enter the number of personal days AFTER it was converted to a rental. Then you only enter the amounts for that rental period (which you need to manually prorate the annual items such as mortgage insurance).
As for your actual question, that also has to do with the number of personal days that you enter. The 'default' method is the IRS method. For easier numbers, let's say you had 200 rental days and 100 personal days. The IRS method would be 66.66% rental expenses and 33.33% personals expenses because it does 200 days out of a total of 300 used days.
But if you select the "Tax Court Method", that prorates the rental days over 365 days regards of how many personal days there are.