If you use the non-online version of TurboTax (CD/Download) then go to the tax data button on the toolbar. Search for "percentage". Find your owner occupied rental under "Schedule E Wks" and select the "percentage rental use" and select "go to form". Find the section that says "Owner-Occupied Rentals:" and on item P check the box for "Check to allocate personal use items to Schedule A". Under item Q for "Percentage of Rental Use" put the percentage of rental use. For instance, if 4 rooms of your house out of 7 rooms are a rental, put in 57.1428%. Then on the tax software, enter the full values for expenses, depreciation, etc. and the software will do the work for you. Just realize that if you spent money specifically for the rental rooms, this will not correctly expense those as 100% against the rental rooms and will allocate a percentage to the entire house. If you have this situation, you will unfortunately manually have to keep track of which expenses are for the rental rooms and make sure 100% of those expenses are taken into account and for expenses that are general to the entire house, you take the percentage.
I wish the software would be upgraded to ask you questions to facilitate this as this has been broken for years now. I wonder what TurboTax software developers are doing all year. I wish in addition to modifying their software for changes to tax rules, they'd fix bugs and defects and improve the software. Regardless, I still love it.
