I select Rental properties, then enter the address info. I answer who owns it and select "Both of us"
I then select "Single Family" on the "What type of rental" it is.
I then select "First year rented, Converted home to rental or rental to home (I am under the assumption I have to select this option since the space went from being just part of our home to a rental space), Rented part of home" options.
On the how was it converted, I select "From primary residence to rental"
I then receive this note:
OK, here are some important things to note:
- If this is the first time you've used this property as rental, make sure you selected First year rented situation on the previous screen.
- In this section, only enter expenses for when the property was a rental.
- Later, in Deductions and Credits, we'll ask about your expenses when you lived in the home.
It then asks if it was rented every single day in 2021? I answered No.
For fair rented days I entered the number of days actually rented starting in August through the end of the year for those days.
It then asks me if I have an Office:
In addition to renting out part of your home, do you have an office in your home? I answered Yes as I do.
Yes, I have an office I use for business
No, I don't
I then get asked if an active participant to which I answered Yes:
If both of these apply, select Yes.
- You own at least 10% of the property
- You made major management decisions for this property such as approving tenants and authorizing repairs
It asks me if I made any payments to contractors. I clicked No
It then asks me if I have any of the uncommon situations that apply and I answered None of these apply.
It then summarizes it and allows me to click "Looks good"
I then click Continue and it prompts me for what type of income. I select "Cash, checks, Venmo/Paypal, and/or Form 1099-K"
I then enter the income
It then asks me to select the Expense categories I have.
I then can select the different expense categories and this is where the confusion lies. If I enter the mortgage interest for the whole property it seems to be deducting all of it. Is there no point where the software asks for a percentage size or sq/ft size of the rental compared to the whole home?
Thanks.
