Does the condo have personal use throughout the tax year (i.e., is it a vacation/short-term rental)? If so, you need to enter the number of fair rental days and personal use days. TurboTax will then allocate the deductible expenses accordingly.

Note that you may also have to make an adjustment in the Assets/Depreciation section.

Yes.  I have been using it up to 20% of the year for personal use and time for repairs/maintenance.  I plan to cut back on its availability and will only have it available to rent 50% of the year.  The remaining 50% will be for personal use and maintenance/repairs.  So, I need to change the percentage for allowable expenses and don't know how to do this in Turbo Tax.  

For the allocation of typical rental expenses, you have to enter the number of fair rental days and the number of personal use days. 

Note that days spent primarily for maintenance/repairs are not personal use days.

If the property is classified as a rental for the entire tax year (all 365 days of it) then there's really nothing to "change" per-se. You enter the number of personal use days and the number of business use days, and the program will allocate accordingly.

If the property is ***NOT*** classified as a rental for the entire tax year, then things are different. For example, if it's classified as a rental from Jan 1 thru Jun 30, and there is no personal use during that time, then the business use percentage is ONE HUNDRED PERCENT. You only enter expenses incurrred during that time and those expenses are ONE HUNDRED PERCENT deductible as rental expenses.

For this scenario, you have 182 business use days and ZERO days of personal use.

Only 10% of my home is rented out to a roommate for the whole year. Where to input 10% in Turbo Tax to calculate the depreciation for Schedule E, Form 1040?

When you first start entering data for the rental, you *MUST* select the option for "* rent out a part of my home".  That is the only way the program will ask you for a percentage.

Note also that you can not "change" the percentage year to year. Now there's two types of percentages that I see in this thread.

 - Percentage of floor space that is exclusive to the renter.  This is most commonly used when you are renting out a part of your primary residence. This percentage can not just be arbitrarily changed each year. Changing it year to year will completely screw up the depreciation history and put you in what I refer to as "tax hell" when either you sell the property, or the IRS audits you.

 - Percentage of time rented. This is most commonly used when you have a property where 100% of the space is rented out for part of the year. If rented out for several months, and then used for personal use the rest of the time, it's best to "declare" this property as a full rental for the entire year. Then when asked, you will report the number of days rented and the number of days of personal use. Those particular numbers *can* change every year. The program will then pro-rate your expenses between SCH E for the number of days rented, and SCH A for the number of days of personal use.

Now "personal use days" is not necessarily the number of days you actually lived in the property either. It's typically the number of days that the property was flat out "not available for rent", weather you were living in it or not.  The number of days rented and days of personal use can be less than 365 days, but it can't be more than that.

The one thing the program will not pro-rate for you, is the property insurance. This is because property insurance is not deductible on the SCH A and never has been. Therefore, you may need to pro-rate the SCH E insurance costs manually yourself, and enter it.

In some situations the program will prorate the property taxes and mortgage interest for SCH E, but will not place the difference on the SCH A. Therefore, you should always check that once the return is completed in it's entirety (and not before) to ensure the SCH A prorated amounts are there. 

Take note that if the total of your SCH A deductions do not exceed your standard deduction, then it won't matter if the pro-rated amounts are there or not, since it would be more beneficial to take the standard deduction instead of itemizing.

Thank you, Carl, for your response. The box for "*rent out a part of my home" had been checked. Still the program did not ask for a percentage. What else can be done?

On the "Do any of these situations apply to this property?" screen, assuming 2021 was your first year there are three selections that you must make.

 - 2021 was the first year I rented this property

 - I rent out part of my home

 - I converted this property from personal use to a rental in 2021

 Then on the screen "Was this property rented for all of 2021?"  you need to (I can't stress this enough) ReAd ThE sMaLl PrInT, because it DoEs MaTtEr big time.  Enter your days rented. Days of personal use will be zero. Again, read the small print and understand the question only applies to the room or portion that is exclusive to the renter. So your days of personal use will be zero.

For home office, you do not have a home office. A home office is not allowed for rental property in your case.

On screen "Let us calculate your rental deductions for you" select YES. Then below that will appear the box for entering what percentage of your floor space is exclusive to the renter.

When you are all done, check the form 4562 and most likely, you'll find that the depreciation amount is wrong. We'll deal with that later. You need to get past this point first.

Thank you for your diligence in helping me Carl. I got the depreciation figure.

Do you want us to go to Form 4562 now? I am eager to learn more from you.

Now, I'm 99% certain that the depreciation shown for 2021 is incorrect. Please go to IRS Pub 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf and use the MACRS worksheet that starts on page 37 to manually figure the depreciation.

For item #6, you must use table A-6 on page 72.

Let me know if the figure you get is more than $5 off what the program says your 2021 depreciation is.

Hi Carl, My depreciation is more than $5 off what the program says my 2021 depreciation is.

Work through the property asset again in the Assets/Depreciation section. You will come to a screen titled "Tell us more about this rental asset".  Select "I purchased this asset"

Below that select "No, I have not always used this item 100% of the time for business"

Then select "I used this item for personal purposes before I started using it in this business"

For "Date I started using it in this business" will be your in service date, which is typically the day a renter "could" have moved in.

Now the last question is "Percentage of time I used this item in this business in 2021". This is where the issue is. For your specific and explicit situation, the question is wrong. It should read "Percentage of floor space that is exclusive to the renter". I know you entered that percentage already on a previous screen. But enter the same percentage (of floor space) here. Then finish working it through. If the depreciation is not spot on what you figured manually it'll be within a few bucks, which is fine. On average, you shouldn't be off more than $2. But like I said, anything within $5 is fine.

This is one of those things that "must" be correct the first year. Otherwise, the amount of incorrect depreciation taken each year will become farther away from the correct amount each year. Then years down the road when you sell the property, the error will come back to bite, and will bite your wallet hard.

I went back to the Assets/Depreciation section. The screen entitled "Tell us more about this rental asset", "I purchased this asset", etc. do not appear anymore. It goes to the screen entitled "Your Property Assets" and gives me an Edit button or Delete button to choose from. I chosed Edit. It then takes me to the screen that says "Review Information." with the "Asset", "Placed in Service", "Section 179", "Special Depreciation", "Depreciation" columns below it. Can't go any further because the only choice is the "Done" button.

What can be done to get to the screen you mentioned, entitled "Tell us more about this rental asset", "I purchased this asset"?

Then select "I used this item for personal purposes before I started using it in this business"

For "Date I started using it in this business" will be your in service date, which is typically the day a renter "could" have moved in.

Now the last question is "Percentage of time I used this item in this business in 2021". This is where the issue is. For your specific and explicit situation, the question is wrong. It should read "Percentage of floor space that is exclusive to the renter".