Rental income and expenses

[chase-thornton]

At what point does Turbotax allocate the percentage of expenses for property rentals? I am entering all my expenses (and my property rental is 20% of my property, meaning only 20% of the expenses should be taken). Turbo tax does not allocate and leaves me with the entire expense, which inflates my  deductions to 100% instead of the 20% needed. Has anyone else noticed this problem? At this point I will enter the allocated amounts myself.

[PatriciaV · Accepted solution]

If your property was not rented all year and you entered a number for rental days or personal use, TurboTax will not offer to allocate your expenses for you. In this case, you need to make the calculations yourself.

[sadiemae]

what forms do I use for all year rental loss?  is it passive activity? does give me money lost, just 0  Sarah Farkes

[Carl]

When renting out a part of your home, there are two questions that *everybody* misunderstands and gets flat out wrong, resulting in no allocations occurring, or blatantly wrong allocations occurring.

 - The percentage of business use is ONE HUNDRED PERCENT BUSINESS USE of the 20% (or whatever) of the property that was rented out.

 - The number of personal use days is *ZERO* days for whatever percentage of the property you are renting out.

[sadiemae]

Thanks for the info. Need to get claims out of passive activity forms, tried to delete but nothing  Can you help me out?

Sarah

[Carl]

Need to get claims out of passive activity forms,

That's to generic a statement. What "specifically" are you calling claims? What specific passive activity forms? In addition to the SCH E, there are literally hundreds of others, if not thousands.

If 2018 is the first year you're dealing with this on the SCH E, simply delete the rental and start over in that section.

In the Rental & Royalties Income (SCH E) section when you get to the screen that list your rental, there's an edit button and a delete button next to it. Select DELETE then work it through to complete the deletion. Then go back into the Rental & Royalties Income (SCH E) section again, and start anew.

[sadiemae]

Thanks Carl,  You gave me great info.  The forms I was talking about are  form 8582 passive activity loss limitations and next one is Schedule E and the form is supplemental income and loss.  Did I do wrong? Turbo Tax wont let me change anything or delete forms  Hope you can help me on this one.  Its my condo rental loss and T.T. says I get nothing back,was  empty all year  Sarah

[Carl]

Its my condo rental loss and T.T. says I get nothing back,was empty all year

I need you to confirm that you are using the desktop version of TurboTax that you physically installed on  your computer. That's what I expect at this late date. But I still want *you* to confirm it.

If it wasn't rented for the *entire* tax year *and* you received no rental income for it in that same entire tax year, then why are you reporting it? Now I don't intend that as a smart arse question. Generally, what you should do is show the property converted from a rental to personal use on Jan 1 of the tax year. There's pro's and con's to doing that, as well as pro's and con's to leaving it as a rental. So that's why I'm asking the question.

Basically, if you did not have it rented all year I expect you would have told the program that it was rented for "zero" days. At that point, the program would have told you (incorrectly in my opinion) to delete the SCH E (which depending on one's specific and explicit circumstances, could really screw you over royally.)