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rmmunna
New Member

I rented a portion of my home for about 5 months last year. How do I properly allocate items such as mortgage interest and property taxes when I also itemize?

So, when Turbo Tax asks what my mortgage interest is in the rental section, do I put what it was for 5 months or the amount on the 1098?  Then what do I put in the itemized deductions section when it asks the same question?  Would it be the amount for the other 7 months?  What about for property taxes under the same scenario when I also itemize?  Thank you!

1 Reply
WillK
Level 9

I rented a portion of my home for about 5 months last year. How do I properly allocate items such as mortgage interest and property taxes when I also itemize?

The rental income is the total amount you receive from all sources for the rental. When you enter the information into the program you will enter under income the total amount you received for the rental. You will also be asked later in the program to enter in all the expenses (including mortgage interest for the property. This will reduce your rental income and properly calculate the profit/loss of the rental.   

To enter in your rental information, please follow the steps below:

1. Login to your Turbo Tax Account

2. Click Continue your return if you have already started a return. 

3. Click on Go to Federal Taxes heading 

4. Click on wages and income (you can either Choose Jump to Full List -or I'll choose what I work on) 

5. Scroll way down to Rentals and Royalties- click on start or update 

6. Follow the interview questions and answer accordingly, you will eventually get to a screen that will say 'Let Us Enter Your Rental Info for You' (check the last circle to enter my rental info myself) 

7. Rental Income - click Start or Update- complete this section 

8. Expenses - click Start or Update- complete this section 

9. Assets/Depreciation - click Start or Update- complete this section 

10. Vehicle Expenses - click Start or Update- complete this section 

Remember you will need to enter in the total rent you received for the year, then you will enter in your expenses (i.e. mortgage interest, repairs, property tax, etc...) You are only able to deduct the mortgage interest, not the principal. When you depreciate the cost of the rental, that will take care of the principal part.  YOU ADD THE PROPERTY TAX INFORMATION UNDER THE RENTAL SECTION AND TURBO TAX WILL CALCULATE THE % FOR RENTAL AND % FOR PERSONAL AND WILL MAKE THE ENTRIES FOR YOU. 

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