@DaveF1006 , @Carl , @Hal_Al I have the identical situation you helped with before but a remaining question:
I rent a room in my home (private residence) call that "C". It is dedicated uniquely to be rented out. I do not personally use it. I ALSO rent out apartments in separate buildings that are NOT my private residence. Call those "A" and "B". I am NOT a real estate professional, though. I just spend 'the time needed' to rent out the places, prepare taxes, organize repairs, etc.
When I follow the TTax step-by-step it puts my rented room-in-home "C" into Column C in Schedule E, arrives at a loss (after I pro-rated all costs by square foot method, including a share of depreciation on my home) AND THEN TOTALS THAT LOSS WITH GAINS ON RENTAL PROPERTIES in columns A and B AND LOWERS MY OVERALL RENTAL REAL ESTATE INCOME (ie. Passive Income).
However, (like several TTax users have, also) my understanding is that renting out a room in your HOME/PRIMARY RESIDENCE is a "special situation" and "IRC section 280A(c)(5) limits deductions to such residential rental income; no deduction for loss is allowed. In meeting this limitation, homeowner expenses are deducted in a specified order—first, the allocated portion of mortgage interest and property taxes; second, allocated amounts of indirect expenses other than depreciation (but only to the extent of remaining income); and last, allowable depreciation only if there is sufficient rental revenue to prevent reporting a rental loss [Proposed Regulations section 1.280A-3(d)(3)]."
So, my understanding is that Turbotax should
1) apply this 'staggered allowance/not of deductions - interest/tax, allocated expenses, depreciation (like it does for home offices on form 8829)
2) prevent any resulting losses to be applied to PASSIVE (as well as active) incomes in Schedule E and instead carry them forward.
TTax is NOT doing that! Is that correct or simply a tax situation that program "can not handle"?
If the latter, then how can I manually adjust Schedule E to not run against the the tax law?
Many many thanks for clarifying this. I have been searching for days on TTax forum and the internet (Nolo, etc.), now, and still not have clarity how to correctly do this on TTax.
