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posted Jun 1, 2019 12:43:10 PM

Purchased a single family residence in June 2018 to rent out but did not rent it in 2018...still working on it. Where do I report this?

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Level 10
Jun 1, 2019 12:43:12 PM

A rental property is not deductible until the property is actually available to rent.  So until the point you make it fully available and are actively seeking a tenant, you can not report it.  Upon the point you are seeking a tenant you will have to file a schedule e during the rental income section of the interview.  You will get to depreciate the value of the home, land is not depreciable.

You can depreciate the tax basis of the building part of a residential rental property (not the basis of the land) over 27.5 years. 

So once available, you will enter the assets purchased and the depreciation start date will be the date the property was available to rent. 

To enter in TT:

Note: If your rental property is located out-of-state, make sure you first set up that state properly in Personal Info. That way, when you do your state taxes, we'll be ready to go.

Now let's enter that rental:

  1. In TurboTax, search for rentals and then click the "Jump to" link in the search result.
  2. Answer Yes to the question Did you have any rental or royalty income and expenses?
  3. Follow the on-screen instructions as you proceed through the rental and royalties section.
    • We'll first ask you to enter general information about your rental (description, address, ownership percentage, etc.) 
    • Eventually, you'll come to the Rental Summary screen which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses.

Tip: Rent is considered income in the year you received it, not the year it applies to. This means that a rent payment for the month of January 2017 collected in December 2016 is reported on your 2016 return.

If you're also filing a nonresident state return to report income from an out-of-state rental property, be sure to complete your nonresident state return before you prepare your resident state return when you get to the State Taxes section.

Alternate Instructions:

  • Go to My Account > Tools > Topic Search
  • Type rental in the search box and click Go.
  • Answer Yes to Do you want to review your rental and royalty information.
  • Proceed through the entire interview to enter your rental property information and enter income and expenses.