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tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

 
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DS30
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

It depends -

If the house was available for rent but was not actually rented during the year, you can report your mortgage interest, property taxes and related expenses under the rental section. You would report the cost of any renovations to the house that are considered capital improvements (and the house itself) under the rental assets section. You would be able to claim a depreciation expense for both the capital improvements and the house. (If the improvements were made before the house was available for rent, then include the capital improvement costs as part of the basis in the house when entering the house as a rental asset.)

A "capital improvement" to your home, meaning the improvement must increase your home's value, adapt it to new uses, or extend its life. Examples of capital improvements are: adding a third bedroom, adding a garage, installing insulation, landscaping and more.

To enter rental information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "rental income and expenses" in the search bar then select "jump to rental income and expenses". TurboTax will guide you in entering this information.

If this house was not available for rent but just used personally, you can report the mortgage interest and property taxes under the home section.

In this case, you will not be able to expense any of the improvements. Any capital improvements to the property would increase the basis in your house (and lower any capital gain on a future sale of the property).

To enter home deductions information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "Schedule A" in the search bar then select "jump to Schedule A". TurboTax will guide you in entering this information.

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9 Replies
DS30
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

It depends -

If the house was available for rent but was not actually rented during the year, you can report your mortgage interest, property taxes and related expenses under the rental section. You would report the cost of any renovations to the house that are considered capital improvements (and the house itself) under the rental assets section. You would be able to claim a depreciation expense for both the capital improvements and the house. (If the improvements were made before the house was available for rent, then include the capital improvement costs as part of the basis in the house when entering the house as a rental asset.)

A "capital improvement" to your home, meaning the improvement must increase your home's value, adapt it to new uses, or extend its life. Examples of capital improvements are: adding a third bedroom, adding a garage, installing insulation, landscaping and more.

To enter rental information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "rental income and expenses" in the search bar then select "jump to rental income and expenses". TurboTax will guide you in entering this information.

If this house was not available for rent but just used personally, you can report the mortgage interest and property taxes under the home section.

In this case, you will not be able to expense any of the improvements. Any capital improvements to the property would increase the basis in your house (and lower any capital gain on a future sale of the property).

To enter home deductions information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "Schedule A" in the search bar then select "jump to Schedule A". TurboTax will guide you in entering this information.

tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

To follow up, can I report the downpayment and closing fees to rental expenses?
DS30
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

No. Both the total purchase price (including the down payment) and the closing cost as part of the basis in the property.
tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

But I can enter Title Insurance and Recording Fees from the closing statement into Escrow Fees, can't I?
DS30
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

I am not sure what you are asking but all these costs you mentioned are part of the closing costs and are added to the basis in the property.
tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

I bought a rental property last year and TurboTax asks me to Enter Escrow Fees in which I see Title Insurance and Recording Fees and so on. Where do I get the number for those? From my closing statement?
tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

I saw this article but still confused: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3090329-how-do-i-find-escrow-fees-for-a-new-rental-property-on-my-...>
DS30
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

Yes you get these amounts from the closing statement. You can add all the closing fees to your basis except for any prepaid property taxes or mortgage interest, then are expenses during the year they are paid.
tomzen
New Member

Last year, we bought a second house (with a second mortgage) and put some money there to improve it, but we didn't have income for rental house. How can I add that?

Yes, but the language TurboTax is using in Escrow Fees does not match the new form of Settlement Statement. Other places of the Rental Property are unclear too and there is no contextual help.
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