I can't change rental property ownership % from 70% to 100% on schedule E. How do I make that change?

[DianeW777]

The ownership percentage can be changed by changing the Rental Property Info. TurboTax will automatically adjust expenses for you. Be sure to check your asset(s)/building, improvements, etc,  to make sure they are being used 100% as well

1. Open your TurboTax account > Search (upper right) > Type rentals > Press enter > Jump to link
2. Select Edit for the property you want to change > Select  Edit beside Rental property info > Edit under Situations
3. Select Rented a unit in multi-unit where you live > Continue to the screen to enter your Rental Use Percentage
4. Enter 100%.

This should allow you to change your property from 70% to 100%. See the images below.

[Carl]

You can't just arbitrarily change your ownership percentage. Doing so will completely screw up a number of things; in particular the depreciation history. That will without question, come back to bite you.

If you already have the property asset listed in the Assets/Depreciation section with 70% ownership, then you have to show your acquisition of the other 30% as a completely and physically separate asset. Then depreciation on that additional 30% will start in 2020 on the date of your acquisition. But there is an easier way less prone to user error resulting in an audit.

Start from the beginning and Indicate that you converted your 70% of  the property to personal use on the date you acquired the other 30%. Enter only the rental expenses incurred up to the date of conversion to personal use. Then work through the assets in the assets/depreciation section. You must do the below for each individual asset listed.

Indicate that "I stopped using this asset in 2020". The conversion date will be one day "BEFORE" you acquired 100% ownership of the property. On the "Special Handling Required?" screen, select YES. (If you select no, you will be "forced" to enter sales information. You did not sell it.)  As you work through the asset, write down the amount in the COST box and the COST OF LAND box. After working through that asset in it's entirety, write down the prior years depreciation and current year depreciation taken. Add those two numbers together to get the total depreciation taken on the property.

Now subtract the total depreciation taken from the amount in the COST box that you wrote down earlier. This will be your new cost basis on this specific asset.

You must do the above for each individual asset listed.

Once done, the entire property and all assets associated with it are converted to personal use on the date that is one day "BEFORE" you acquired 100% ownership of the property.

Now you will enter an entirely new rental property of which you own 100% of. Your acquisition date of that property will be the date you acquired 100% ownership of it.  Your cost basis of the property and any other assets listed will be the "adjusted" cost basis you figured on each asset with the math above. Depreciation will start over from day one (the date you acquired 100% ownership) for the next 27.5 years.

[sufong]

How to input the ownship name and % for the rental property.  Im trying to search but no slot that I can enter the search information.

[Carl]

@sufong your question as asked, is directly answered above. I note that your post is an "add on" to thread you did not start. Therefore, your situation is most likely completely different than the situation outlined in this thread. Please start a completely new thread providing the precise details of "your" specific situation, and you'll have a better chance of getting a "correct" response to that specific situation.

[stc255]

I'm having the same problem as the original poster, and I don't see the option as shown in the screenshot of one of the responses.

[ColeenD3]

@stc255

Don't follow the one with the screen shot. I am reposting the answer that you should adhere to from Carl.

You can't just arbitrarily change your ownership percentage. Doing so will completely screw up a number of things; in particular the depreciation history. That will without question, come back to bite you.

If you already have the property asset listed in the Assets/Depreciation section with 70% ownership, then you have to show your acquisition of the other 30% as a completely and physically separate asset. Then depreciation on that additional 30% will start in 2020 on the date of your acquisition. But there is an easier way less prone to user error resulting in an audit.

Start from the beginning and Indicate that you converted your 70% of  the property to personal use on the date you acquired the other 30%. Enter only the rental expenses incurred up to the date of conversion to personal use. Then work through the assets in the assets/depreciation section. You must do the below for each individual asset listed.

Indicate that "I stopped using this asset in 2020". The conversion date will be one day "BEFORE" you acquired 100% ownership of the property. On the "Special Handling Required?" screen, select YES. (If you select no, you will be "forced" to enter sales information. You did not sell it.)  As you work through the asset, write down the amount in the COST box and the COST OF LAND box. After working through that asset in it's entirety, write down the prior years depreciation and current year depreciation taken. Add those two numbers together to get the total depreciation taken on the property.

Now subtract the total depreciation taken from the amount in the COST box that you wrote down earlier. This will be your new cost basis on this specific asset.

You must do the above for each individual asset listed.

Once done, the entire property and all assets associated with it are converted to personal use on the date that is one day "BEFORE" you acquired 100% ownership of the property.

Now you will enter an entirely new rental property of which you own 100% of. Your acquisition date of that property will be the date you acquired 100% ownership of it.  Your cost basis of the property and any other assets listed will be the "adjusted" cost basis you figured on each asset with the math above. Depreciation will start over from day one (the date you acquired 100% ownership) for the next 27.5 years.

[stc255]

Alright, I just got off of support with TurboTax and found a solution, so I'll put it here for reference if it is helpful for the original poster:

My rental income is from renting a room that is part of my home property. So when I put in all of the expenses that I want to deduct against my rental income, I've always manually calculated the portion of total housing expenses that I want to apply against that rental income. But since there are some expenses that are strictly for the rental unit, and some that are shared, it's a mixed calculation.

Now after I had entered all of these expenses, upon final review, I was prompted to enter what percentage of my home my rental unit was. I put in 33%, but what this did was revise the expenses that I had already corrected for this portion to a third: so in many cases expenses were now showing as a 1/3 of what they should be. There is no way to fix this, so if you manually calculate your expenses, watch out! TurboTax instructed me to delete the whole Schedule E worksheet and start again.

Then when prompted for that percentage on final review, BE SURE TO TYPE IN 100% if you don't want your expenses all automatically adjusted by that percent.

[Carl]

Be aware also there are two other percentages one has to deal with too, when renting out a part of your home in the year of converting that space to a rental.

- Percentage of floor space rented that is exclusive to the renter. This is less than 100%

-Percentage of personal use of that floor space that is exclusive to the renter. This will commonly be 100%, as once you convert it to rental use, that space remains 100% business use unless you do "in fact" use it for personal use while it's classified as rental use. What you used that space for before converting it to a rental, does not count for anything.

There's also a question on the screen "just before" the summary screen that asks percentage of time it was rented the whole year. That question needs to be answered "AS IF" it's asking percentage of floor space that was rented, because for that specific and explicit situation, that's what the question "should" be asking.

[Kazdonh1]

It is ideal to review previous returns and see  when the turbo tax version changes caused the error error.  I specifically remember converting it to 100% on the year I gained full ownership in 2012.   I am not sure when, how and why turbo tax quit asking the ownership question but I know I changed the percent when I became full owner.  

I believe this is on Turbo Tax to correct the error and I ask support in doing so. 

[Carl]

I specifically remember converting it to 100% on the year I gained full ownership in 2012.

Don't know your details of how you did it or how you acquired the percentage you did not own prior to that. But be aware you can't just go into an asset and change the ownership percentage number. When you do that with TurboTax, it completely skews the depreciation history big time, and makes your current year (year you changed the percentage) flat out wrong. Every year after that will be wrong too.

[Fanglet]

I am trying to follow @Carl  instructions to the original poster as I have a very similar situation.  The portion of the rental property that I did not own was given to me in a quit claim deed by my dying parent in January 2022.  I have allocated income and expenses prior to that exchange to the pre-existing rental business, and recorded the cost and depreciation values to calculate my new basis.  

My question is how to answer turbotax questions about how I acquired the property.  The property was my residence in the past. I did purchase part of the property before using it as  residence and later converting it to a rental.  I also acquired the remaining portion of ownership as a quit claim deed from a parent to a child.  So should I answer yes to "did you purchase the property?"  If no, how should I answer the question "how did you acquire the property?"

Thank you

[Carl]

If it was guit claimed to you, then you acquired it as a gift. With that, your cost basis is the same as the cost basis of the giver, and you also inherit any depreciation the giver has taken, by using the same in service date as the giver had.

[tagteam]

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@Fanglet wrote:

The portion of the rental property that I did not own was given to me in a quit claim deed by my dying parent....

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You could make a case for an implied life estate which would work out better for you in terms of the basis of that share of the property (your basis for that portion would be the fair market value on the date of death of your parent).

See https://www.law.cornell.edu/cfr/text/26/20.2036-1