Carl
Level 15

Investors & landlords

Let's just stop and back up a bit. Having had time to think this through and re-read your posts, I see now that we are both making things significantly more difficult than they need to be.

As I understand things, 2021 was the first year *EVER* that you rented out any part of your primary residence. If this is correct, then it's best to just forget about reporting the income received the first 10 months of 2021 as rental income. So, do not enter anything on your tax return in the rental section for income received that first 10 months when you rented out 33% of your primary residence. Simply report that income as "other income" and be done with it.

Then for the SCH E, report conversion of your primary residence to 100% rental on Nov 20, 2021 and go from there.

Doing it your original way of thinking will not reduce your taxable income by any significant amount that would make it worth while really, but it will significantly increase the probability of errors that will basically bite you in the butt years down the road. So that's why I suggest you treat that first 10 months as a cost sharing arrangement and just report the income as other income. If you're on board with me on this, let me know as I have information to provide that will help ensure you set up your 100% rental correctly in what will be your first year as a landlord.

When setting up a rental property in TurboTax (or any other program for that matter) absolute perfection is not an option.... its a must. Even the tiniest of mistakes can (and will) grow exponentially over time. Then when you catch the error years down the road, the cost of fixing it will be high.  So lets just treat the first 10 months of 2021 as a simple cost sharing arrangement to keep things as simple as you practically can.