Rented my home for 45 days (used it 319). Turbo tax will ratio expenses. However, I have some which are dedicated to the rental (like VRBO adveristing) which should not be ratiod. How do I enter these in the turbotax program so they are fully applied?

[apdickinson]

I have rented my home for 45 days and used it for 319 days.

I'm familiar with the rents and royalty section since I also have a couple investment properties.

I understand the quicken program will do the pro-rata calculation to carve up my expenses based of the days rented and the days used myself (Utilities, tax, repairs etc).   However, in renting the home I have some expense which is dedicated just to the rental.   For example, I pay $499 to VRBO to list our home on their platform as an advertising expense.  Similarly, we are in an HOA which requires a guest rental fee of $500.  How do I enter these in the program so that these unique fees are applied against the rental income and NOT allocated between rental and pers use... since there is no personal use.   Thanks, Al

[Critter-3]

Follow the interview screens ...  WAIT for this screen to enter in rental expenses ONLY  ... all the other common expenses screens will prorate automatically ... then BEFORE you file review the Sch E and it's worksheets carefully ... make changes before you file. 

[Carl]

I did a few run throughs using different settings for the same scenario, and I can't really get any method that will work correctly. These are the parameters I used.

Primary Residence - 1 Jan - 31 Mar 2019

Residential Rental Real estate 1 Apr - 15 May 2019

Primary Residence - 16 May - 31 Dec 2019

The best scenario that worked for me was showing the property converted to rental 1 Apr with 100% business use and conversion back to personal use on 16 Mar. It required me to split the mortgage interest and property taxes myself, as well as pro-rate the insurance costs. All other expenses were 100% deductible. (I only claimed those expenses incurred for the 45 days the property was a rental, including utilities.)

Now I did see where during the initial setup process I was asked if I'd used this property for business in the past. If I select no, then no issues. But if I select yes then I'm asked for all prior depreciation taken. That number "seems" to be taken into account correctly and doesn't "appear" to mess things up. But I've not yet dived into the forms and worksheets to confirm that.  Overall though, based on the numbers I see it appears to be dealing with prior business use of the property correctly.

[Critter-3]

WAIT WAIT WAIT A MINUTE ....  this was not a vacation home where you use it sometimes and others at other times ???     This was a personal residence that only you used ... then you totally moved out for a period of time ... then the renters left and you moved back in ????    Or did you just rent out part of your home for a short time ?    Is this an AirBNB  situation ???

[apdickinson]

Thank you for the quick and clear reply.  It seems so obvious now.   I missed the ONLY which was in bold.  

As a follow on related question.   Since I rented for 45 days (12%) the depreciation schedule was set up and Turbotax correctly applied the depreciation and prorated this since I entered I used it 12% on the asset section.   Next year if I rent it for 20%, will the 2020 schedule allow me to change that depreciation percentage?

[apdickinson]

This is my personal home.   I rented it out for 45 days on airbnb.  We left on Jan 30th and returned March 16th.  While we were away we went on an extended cruise/vacation.   

1) Turbotax is ratioing the expenses (Utilities, Property tax, interest)

2) For Unique rental expense - - like the VRBO $499 advertising fee I will enter that as instructed above under "Any Miscellaneous Expenses"  Expenses applicable ONLY to the rental of your home.

3) For the depreciation I entered the date I purchased the home and the asset value from 2018.  I also included the renovation cost as a sperate line item, and lastly the kitchen appliances as a third line item.

When asked if I used this item 100% for business since I acquired the asset i said "NO"   I then selected "I first used this item at least part of the time for business and also used it for personal use"    I then entered 1/1/2019 as the initial business use and filled in the percentage of 12.3% for 45 days which was rented.

This seems OK for 2019 --  but thinking ahead,  what if I rent it a different about in 2020, 2021 etc etc... will turbotax be able to adjust the depreciation schedule appropriately?  

[AmeliesUncle]

You need to adjust the business percentage each year in the depreciation section.

Also, if you enter amounts under (1) Advertising, (2) Commissions and/or (3) Management Fees, the program gives 100% deduction because those items only apply to rental properties.  So you could enter it under Advertising it should work fine.