TurboTax will not automatically split your depreciation using the rental/personal percentage
Yes it will. As you start working through the Rental & Royalty Income section of the program, you'll come to screen titled, "Do any of these situations apply to this property?" On this screen you must make three selections.
- 2020 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 2020.
Then on the screen, "Let us calculate your rental deductions for you" select YES and then enter the percentage of floor space that is exclusive to the renter.
Next, you enter the property in the assets/depreciation section. When you get to the screen titled, "Tell us more about this rental asset" you will select "I purchased this asset new", and select "No I have not always used this item 100% of the time for this business" then select "I used this item for personal purposes before I started using it in this business".
On that same screen where it asks "Percentage of time I used this item for business in 2020", you enter *not the percentage of time*, but the percentage of floor space that is exclusive to the tenant. The percentage entered here should be the same percentage you entered earlier. Then enter the date that space was converted to rental use.
Now the one thing that will not be pro-rated by the program is the property insurance. I don't know why, but I can speculate. (Won't waste your time with that.) So you will need to pro-rate the property insurance yourself.
The simplest way is to first divide the amount by 12 to get the cost of insurance per month. Then multiply that result by the number of months. Finally, multiply that result by the percentage of floor space rented.
