How to bypass the "this property is owned by: "me" while filing a schedule E for a property I rented

[pbmunkey]

I rented a home and Airbnb'd it for a profit. I would like to report my income on a schedule E but turbotax home and business is only allowing me to select myself or my wife under "this property is owned by" section. I do not own the property. How can I bypass this?

[DianeW777]

You cannot bypass, you should select either of you to move forward. According to the IRS Publication 527, you can use Schedule E for rental income and expenses, however you would have no rental asset (home and land).  The cost would be zero for you.

• Generally, if you pay rent for property, you can’t depreciate that property. Usually, only the owner can depreciate it. However, if you make permanent improvements to leased property, you may be able to depreciate the improvements" 

You would report the rental income and expenses in the Federal section of TurboTax, then Income and Expenses, then Rental Properties and Royalties. When you set up the property, don't add anything for the cost of it. You should deduct your rental payment as Rent Expense after setting up that expense as an Other Expense.  You should use the Premier version of TurboTax.

[pbmunkey]

I have to use home and business because I have other schedule C's to file. I chose myself as the "owner" as suggested; however, in another screen, I was asked if I was the only owner of this property in 2023. I was given only 2 options: yes, I owned 100% of said property or No, I owned less than 100%. I tried selecting "no" and lowered ownership to 0% but the software automatically calculated my income and expenses in accordance with my ownership % which equated to $0 on everything. Please advice.

[PatriciaV · Accepted solution]

In the Schedule E Property Profile section, answer "Yes" to the Property Ownership question, even though you rented the property. This allows you to report all rental income and claim all rental expenses for your rental property. 

However, under Assets/Depreciation, you may report only Improvements or other depreciable assets (like appliances). Do not enter the residence itself for depreciation because you did not own the property.