You will enter this under Income...Rentals, Royalties and Farm.
For the type of Rental, Select Other
Give the rental property a name like Third Floor Rental
Than follow the screens until you can pick Rented Part of Home
You will get to the question:
Since you rented part of your home, would you like us to automatically divide Third floor's expenses?
The easiest way is to put in the percentage of the home that is rented and let TurboTax do the math.
Enter your income and expenses for the rented portion of your home. For example if your home mortgage interest is 3,000 - enter 3,000 and TurboTax will divide it and enter $1000 for you rental expenses.
When you figure depreciation only put in the cost of the home. Do not include the land. Land does not depreciate.
Here is some rental property information from TurboTax.
