If your room is 100% rental use, then you can deduct losses. That portion of your house is business property.
You can deduct, for that room of the house, items necessary to produce income. Mortgage interest, property taxes and PMI are normally deducted on Schedule A anyway, so these will be prorated on both Schedules A and E. Expenses that exclusive rental expenses still have to be prorated, you just can't take the personal portion on Schedule A.
When you're answer the question regarding how many days is a room in your house rented, answer the number of days rented and how many days you used that room personally the rest of the year. You can't rent it and use it personally at the same time. If it was rented all year, put 365.
Screens to take notice of in the program:
"Do any of These Situations apply to This Property"
Select "I rent out part of my home".
When you marked the box for TurboTax to allocate per the percentage of the business portion of a mixed-use property the expenses are only entered one time in the rental section and TurboTax will allocate correctly to personal Schedule A and business to Schedule E according to the percent you entered.
Yes, to let TurboTax calculate the expenses for you.
On screen "enter use percentage" this where the % goes for TurboTax to do the calculation or enter rental use percentage. TurboTax will flow personal to Schedule A and rental to Schedule E.
Only the exclusive used are is considered rental area. Common area is available to all and is not a factor in allocation of expenses.
How to divide expenses. If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. You can use any reasonable method for dividing the expense. It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home.
