I rented out my house in Dec (for <15 days) but I received advance for 6months via prop manager 1099. How'd I make turbotax let me file the rent in 2019?

[RobertG]

What problem are you having entering it as a rental property?

Generally, you include any advance rent paid in income in the year you receive it regardless of the period covered or the method of accounting you use.

[mussie_mn]

Thank you for the response.

The problem that I am having is the following when I fill in Schedule E based on 1099-MISC. 

I arrived at a page that asks, "Was this property rented for all of 2019?" I selected No.

"Days rented at a fair rental price :" I entered 12.

"Personal use during the year:" I entered <number of days I lived in the house>

Then the question, "Was this property your residence ?" I answered yes.

This is when I got the message...

If you lived in this unit during the year as your residence, and you rented the property for less than 15 days, income from this property should not be included in your gross income.... Go back and review number of days rented or continue and Turbotax will remove this rental property from your tax return. 

[mussie_mn]

When I remove the days I lived in the house, it allows me to file but that seems wrong.

[KrisD15]

You don't need to claim the rent for the less than 15 days, but you do need to report the advance rent and claim that as taxable income. 

The program won't understand, so you will need to enter the advance rent on Schedule E if the rental was in service for tax year 2019.

If it was not, enter the amount of advance rent as "other income". 

You will need to decide if it was your personal residence in 2019, or started as rental property in 2019. 

Below is an IRS link with more information:

IRS Rental Facts

[AmeliesUncle]

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@mussie_mn wrote:

When I remove the days I lived in the house, it allows me to file but that seems wrong.

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It sounds like you converted it to 100% business use (no personal use expected for a year or more).  Assuming that is the case, enter ZERO personal days.  That is the correct way to file it.

[JohnB5677]

Under this rule, IRS 14 Day Rental  you don't pay tax on income you earn from the short-term rental, as long as you rent the property for no more than 14 days during the year.

14/60 ths can be allocated out of the deposit at no tax for 2019.

Since the money you received was a deposit, and not really yours yet, it will be allocated to 2020 provided they complete the rental activity.

[mussie_mn]

Thank you for the response. Maybe my question was not clear. I lived in the house for the bigger portion of the year. It *was* my residence. I then rented it out on Decemebr 20th 2019 for a lease of 7 months and received advance for 6 months and 12 days. I rented it out thru a property manger who issued me a 1099-MISC and reported all of the 6 months and 12 days amount. The problem I am having is when I fill in the fact that I rented out for 12 only in 2019, TurboTax will remove it because it is less than 15 days. I am thinking either a) TurboTax has a bug to prevent me from filling in advance payment in the year of receipt or b) the property manager should not have issued the 1099-MISC in 2019. I really need help for this corner case. Thanks

[AmeliesUncle]

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@mussie_mn wrote:

 for a lease of 7 months 

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What is going to happen after those 7 months?  If it will continue to be a rental, see my comment above.  You would enter ZERO personal days.

[mussie_mn]

Thanks @AmeliesUncle I will most likely continue to rent it and less likely sell it. However, in 2019, I lived in the house for almost 300 days and entering zero didn't feel right to me. However, if you think that's the way, I will do it. Final question, now that I am filing the income in 2019 tax, would I then just approximate my expenses? I can estimate the management fee, advertising, but I can't foresee maintenance costs...

[AmeliesUncle]

Assuming you are using the "cash" method of accounting (almost everybody does), unfortunately you report income when you receive it and expenses when you pay them.

That means only expenses you actually paid in 2019 will go on your 2019 tax return.  Expenses you pay in 2020 will go on your 2020 tax return.  So your 2019 return will show a bunch of income but very little expenses.