Air B&B Rental of Part of Home, Direct Rental Expenses

[danioh]

Because of how TurboTax works with rental expenses, it appears impossible to enter direct expenses (improvements to only the part of the house that is rented out, furnishings for only that part of the house, amenities for guests like soaps, etc.) It seems like I enter those amounts and the program prorates them according to the amount of my house that's being rented out (40%) and the amount of time it was rented out last year (7 months). It's really important to be able to enter the whole-house expenses separately from the rental-only expenses, but I cannot seem to control how it manages that.

Help?!

[DanO · Accepted solution]

To easily manage your expenses would be to run the AirBnb as a business and take the expense deductions on a Schedule C, but this would meaning paying SE taxes.

The other thing that you could do is to manually calculate the expenses that pertain to the rental and enter them after setting up your rental property.  During the set up of the property you will come to the page, Let Us Calculate Your Expense Deductions for You - click on No, I'll do the math and enter only the rental-related portion.

The rest of the house deductions can be handled in the Deductions & Credits section.