Expense refund and other expense on schedule E after sold property

[tracyschmid]

We sold our rental property 12/30/2022.  In 2023 received a refund of property insurance and a 1098 for mortgage interest paid at the closing, because the bank didn't post the payment until 1/3/2023.  I didn't know I could write off the mortgage interest without a 1098.  So, I have the expense refund and the mortgage interest expense for 2023 but no property that we owned.  How should this be reported?  They probably should have been included in 2022 schedule E but I didn't think of it.  Should I use Schedule E, even though we didn't own the property in 2023?  Should I use Schedule C instead?  What about the negative expense of refunded insurance?  THANK YOU!!!!

[DianeW777]

The refund of insurance should be other income because the rental activity is no longer yours in 2023.  The mortgage interest paid in 2023 could be considered as your second home and deducted on itemized deductions only if it was not rented at time of the sale.  If it was rented, then there is no deduction for the mortgage interest paid in 2023.

Other Miscellaneous Income:

1. Go to the Wages and Income  section of TurboTax
2. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
3. Select Other reportable Income > Enter a description (----) and the amount

         

@tracyschmid 

[tracyschmid]

Thank you for your quick reply!  I was hoping to be able to offset the income from the refund with the mortgage interest. I'm thankful that I know what to do now though!