Purchase new Primary home and convert old primary home to rental

[Anonymous]

I lived in property A until 07/2024 in a primary home, then we purchased a new property B. From 08/2024 we rented out property A and property B is now new primary home. 
I've received 1098 mortgage statement which outline real estate/ property taxes of 9000$ and mortgage interest of 22000$ for the entire year. 
Rental income from Aug to Dec 2024 is 9000$. 

How do I file schedule E for rental property. 
I have hard time when i how to file in Turbotax software, can you explain this brief in step by step.

[PatriciaV]

Please clarify which version of TurboTax you are using: TurboTax Online or TurboTax for Desktop? Windows or Mac? If Online, which browser? This will allow us to provide a better step-by-step instructions.

[Anonymous]

I'm using Online version and google chrome. 

[PatriciaV]

To enter your rental:

1. Open or continue your return.
2. Navigate to the rentals section:
   • TurboTax Online/Mobile: Click this link: rentals 
3. Answer Yes to the question Did you have any income from rentals or royalties?
4. On the next screen, Let's see if you're a real estate professional, select any options that apply to you (this is unusual).
5. On the screen What are you here to report? select Rental property and Continue.
   • If you have more than one rental property to report, no problem—just start with one, and we’ll come back to the other one(s) later.
6. On the following screens, enter all the info we need about your rental property:
   1. Enter a description of the property - be sure to check the box for "I converted this property from personal use to a rental."
   2. Read the page "Converting Your Home to a Rental" for info on what to enter.
   3. Check the box for "No, this property was not rented all year."
   4. Enter the number of days it was available to be rented. If you never occupied the home after you listed it, you have zero personal use days.
   5. If you made decisions for the property, you were an active participant.
   6. Enter your rental income.
   7. Enter your rental expenses, including mortgage interest and property taxes.
   8. Add the residence as an asset for Depreciation.
   9. Add vehicle expenses, if any.
7. TurboTax will walk you through all the questions you need to answer. Take note of any blue "Learn More" links or blue question marks above an entry box if you need more help.
8. If you have other specific questions, make a new post here in the Community.

These articles may be helpful:

• Where do I enter income and expenses from a rental property?
• What kinds of rental property expenses can I deduct?
• How do I handle capital improvements and depreciation for my rental?

[Anonymous]

I initially planned to enter 153 rental days (from August to December 2024) and 213 personal use days (from January to July 2024) as per my understanding of Publication 527. However, I wanted to clarify the reason for entering "0" personal use days as you suggested, as I’m thinking about it in terms of the regulations provided in the publication.

Could you please provide more context on why personal use days should be entered as 0 days in this scenario and applicable regulation subsection that details this?

Additionally, if I enter 0 personal use days, should I manually calculate the mortgage interest and real estate taxes for the 153 rental days and enter that manually into the software? The reason I ask is that, if I enter 0 personal use days, the software seems to automatically apply the amounts from my 1099 mortgage form without considering any personal use days. So I've to manually calculate the amount taxes for 153 days (Amount*153/365) and I've to input them in SW. 

However, if I enter 213 days of personal use, then software then calculates the mortgage interest and real estate taxes based on those personal use days, potentially reducing the rental portion I can claim.

Could you walk me through the reasoning here, and best approach to proceed here with best reasoning.

[PatriciaV · Accepted solution]

Personal Use Days are any days that you used the rental space during the period it was available to be rented.

If you did not personally occupy the space while it was rented, you would enter zero personal use days.

See IRS Pub 527 Residential Rental Property: Days used as a main home before or after renting

Yes, you will need to enter only the portion of your shared expenses that relate to the rental use. Because this is not an owner-occupied rental (like a duplex), TurboTax cannot allocate these expenses properly.

IRS Pub 527: Property Changed to Rental Use:

If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use.