Rent below market value (non profit) but a loss - what do I do?

[noraknotes]

Despite putting that my property is rented every day below fair value and having a loss, TurboTax still wants me to take a ($4,600) loss on my taxes, when it is disallowed. It stuck my rental into a Sch E.

Do I still need to report this property or income if I'm renting far below market value and at a loss? The losses are disallowed. All other answers say to report the income as Miscellaneous Income but I did not make money off this property and have no intention to. 

Thanks! 

[Mike9241 · Accepted solution]

since rented below FMV and all days rented would b personal use days, it's treated as a personal residence. keep your life simple. don't enter rental income or expenses. - no schedule e

mortgage interest and real estate taxes are entered on schedule A.

[noraknotes]

Thank you! That's what I figured and did last year but TurboTax confused me this year. 😥 SOLVED! 

[Carl]

If you did enter this on SCH E, the depreciation and other expenses would get your taxable rental income to zero anyway, with no excess losses allowed or carried over. So you would not pay taxes on that rental income, weather you entered it or not.

However, if you live in a state that taxes personal income and offers a "renter's credit", and the tenant wants that credit, you may have no choice but to do the SCH E, even though the reported rental income would not be taxed in the end.

If your property is in the state of Hawaii, then you have to report it, as HI assesses a GET tax (GET=General Excise Tax) on the gross rental income before "any" deductions are taken.

[Anonymous_]

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@Carl wrote:

If you did enter this on SCH E, the depreciation and other expenses would get your taxable rental income to zero anyway, with no excess losses allowed or carried over.....

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As @Mike9241 wrote in his post: "No Schedule E"; income is entered as miscellaneous income and deductions are entered on Schedule A. 

Thus, if this were entered on Schedule E, it needs to be deleted and re-entered properly.