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maahtin
New Member

How do I complete Schedule E for the room I rented out in my home?

How should the 'Type of Property' in Schedule E box 1b and the 'Fair Rental Days' and 'Personal Use Days' be entered on Schedule E box 2, for the room I rented out in my house for part of the year?

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PaulaM
Employee Tax Expert

How do I complete Schedule E for the room I rented out in my home?

Indicate under the Property Profile section the type of rental (single family home). This will flow to box 1b on the schedule E. Continue to enter that you rented a part of your home. Then continue to enter the number of rental days used and personal use days, which flow to box 2 on the form.

Note: Personal Use days refers to days that you used the rental. Think of it as a separate unit. Enter 0 if you never used the room while it was rented. 

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PaulaM
Employee Tax Expert

How do I complete Schedule E for the room I rented out in my home?

Indicate under the Property Profile section the type of rental (single family home). This will flow to box 1b on the schedule E. Continue to enter that you rented a part of your home. Then continue to enter the number of rental days used and personal use days, which flow to box 2 on the form.

Note: Personal Use days refers to days that you used the rental. Think of it as a separate unit. Enter 0 if you never used the room while it was rented. 

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taxquestioner
New Member

How do I complete Schedule E for the room I rented out in my home?

Hello,

 

I've read that if you are renting just a room, the personal use days are 365 minus the days rented. The room by itself is not a dwelling unit. Am I missing something? Thanks!

AmeliesUncle
Level 13

How do I complete Schedule E for the room I rented out in my home?


@taxquestioner wrote:

Hello,

 

I've read that if you are renting just a room, the personal use days are 365 minus the days rented. The room by itself is not a dwelling unit. Am I missing something? Thanks!


Entering the personal and rental days is to prorate expenses.  That proration based on days is done the same regardless if it is the entire "dwelling unit" or just part of it.

 

In connection with the proration of expenses, the Tax Code specifically uses the phrase "unit (or portion thereof)".

AlexanderS08
Expert Alumni

How do I complete Schedule E for the room I rented out in my home?

You are correct that, generally, personal use days are calculated by subtracting the rental days from 365; however, please be aware that sometimes a rental property may be listed for rent or being prepared for rental and those days would not be considered personal use days. @taxquestioner

 

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Carl
Level 15

How do I complete Schedule E for the room I rented out in my home?

Days of personal use will practically always be zero. The days of personal use is the number of days you used to property or space for personal use *AFTER* you converted it to a rental.

So if you rented out 1 room in your house and you converted that one room to a rental on Aug 1 of the tax year and you "NEVER" used that room for your personal use after that date, your days of personal use is ZERO. Doesn't matter if the room sat empty and you didn't actually get a renter in there for three months after the date of conversion. So long as you did not use the room for personal use for one single day after the date of conversion, the days of personal use is ZERO.

Additionally, if you converted the room to a rental on Aug 1, that means it was classified as a rental from Aug 1 through Dec 31 which is 151 days. That means it is physically impossible for you to have more than 150 days of personal use. (If you claim the entire 151 days of personal use, then you can't classify it as a rental.)

Gadz00ks
New Member

How do I complete Schedule E for the room I rented out in my home?

I don't understand your instruction to "continue" to add that I've rented a room.

Is this because I just signed up on Intuit and have so far only looked at the paper Schedule E form? Or did I miss something?

Thanks in advance!

Gadz00ks
New Member

How do I complete Schedule E for the room I rented out in my home?

{continued/clarified] where to put that I've rented part of my house...

JotikaT2
Employee Tax Expert

How do I complete Schedule E for the room I rented out in my home?

Go to the Federal section in TurboTax.

  1. Select "Income & expenses"
  2. Select "Rental Properties & Royalties (Sch. E.)
  3. Answer the questions relating to your property until you see the screen which says "Do Any of These Situations Apply to This Property".
  4. Under the Rental section, check the box where it says "I rent out part of my home".

Rent out part of my house

 

Click continue to answer the remaining questions regarding the room you rented out.  

 

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isamom1982
Level 3

How do I complete Schedule E for the room I rented out in my home?

@PaulaM  - I, also, rent out a room in my home (my main residence) for part of the year (for the rest it stays empty). I saw your post on how to start to enter that through the "Do Any of These situations Apply to this Property" screen.  I have three related questions, though:

1) Does Turbo Tax (2021 Home and Business Desktop edition) tell me later in the step-by-step if I can/should apportion a DEPRECIATION for my residence to this room in Schedule E line 18?

2) Does TT help me calculate the depreciable basis amount, create a Form 4562 and track the depreciation year on year?  (I assume the pro-ration of the depreciation happens based on the % of total square footage of the residence).

3) Most importantly: Does TT SEPARATE the handling of the "room  in residence" column in Schedule E to account for its "Non-Passive" character? -- I understand that rental of a room in your own residence falls under a "special provision" that makes income "non-passive" and disallows losses (they need to be carried forward) - IRC section 280A.  Thus incomes or losses from this column of Schedule E should not be totaled with other as happens with 'normal rental income / losses that ARE passive. 

DaveF1006
Employee Tax Expert

How do I complete Schedule E for the room I rented out in my home?

Yes Turbo Tax will do these things automatically. First and foremost, be sure to indicate you rent out part of your home as JotikaT2 mentions in her previous post.

  1. After entering the information, you will reach a screen that says let us calculate your expense deductions for you.  Here you can decide to enter the expenses from your own calculations or let Turbo Tax do it. Here you must make a choice and it is recommended you let Turbo Tax do the work.
  2. Next screen will ask you you what percentage of the house is the room that is rented out. The best way to determine this is to take the square footage of the room and divide it by the square footage of the house.
  3. After this, all expenses  will be calculated according to the percentage included above. 
  4. To claim the correct amount of depreciation, go to assets and depreciation in your summary page. Enter the information about the cost basis and most importantly, the date you put your rental room in service.
  5. What is important now is this when the program asks if you used this asset 100% for business, say no. Then it will ask you for a percentage, put in the percentage that you calculated in step 2. if you don't, the program will depreciate the entire house and this is not correct.
  6. A 4562 form will be generated if this is the first year the room has been rented.  This intuit source lists the conditions when the form is required. 
  7. In determining if these are treated as non-passive losses, I referenced this link regarding  IRC section 280A. It mentions that Subsection (a) shall not apply to any item to the extent such item is allocable to a portion of the dwelling unit which is exclusively used on a regular basis. In this example, if the room is used exclusively as a rental room, then the deduction is allowed as a passive loss. Please review this under exceptions listed in the link.
  8. Hope this helps.

@isamom1982

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