Investors & landlords

Unfortunately, the "vacation home" rules do apply.  Even though that room may be exclusively rental use, the "Dwelling Unit" (which means a complete home/apartment, including a kitchen) is used as a Residence by you.  That triggers the "vacation home" rules.

 

Technically, Critter is correct is saying that you should enter zero personal days and then enter the number of days available for rent.  However TurboTax is NOT set up for this situation, so in order to 'make it work' in the program, you need to enter some personal days.  You need to calculate what percentage of the home is allocated to the rental, then invent numbers to correspond to the percentage.  For example, if it was 20%, you could enter 20 rental days and 80 personal days to get the 20% (using the IRS Method ... 20 rental days out of a total of 100 used days).

 

Even then, it can be problematic.  You need to enter at least 15 rental days, or the program won't let you continue.  And if the space is less than 10% of the home, I don't think you will be able to do it without overrides.  And because it is a partial year, you would further need to manually calculate the numbers you enter to correspond with the partial year of use.   You may consider using a tax professional.

 

Under the "vacation home" rules, you may not be allowed to use some or all of the loss against other income  It will carry forward, and if the rental is profitable in future years, this loss can offset that.