Reporting Mortgage Interest on a property that was primary residence for 3 months, then converted to rental property

[jonathan-nerti]

I lived in residence from Jan 2016 to March 2016, then converted to rental property from April 2016 to Dec 2016. Do I report 9 months worth of mortgage interest in the 'Rental Income' section, and 3 months of mortgage interest in the 'Deductions/Credits', or all 12 months in the 'Rental Income' section? or all 12 months in the 'Deduction/Credits' section?  I believe I can't duplicate in both sections correct?

[DS30]

Yes, divide the mortgage interest amount and report it separately under each section (rental section and home section).

When entering your mortgage information, you can divide the amounts of mortgage interest, mortgage insurance and property taxes between the number of days (or months) the home was your residence and the number of days (or months) the home was a rental property.

For example, if your mortgage interest is $12,000 and your home was only available for rent for 5 months, then $5,000 will be allocated to your rental (Schedule E) and $7,000 will be allocated to your home mortgage interest deduction (Schedule A). Report each portion separately under the corresponding section in TurboTax (see below).

Please note that if your home was available for rent for 9 months but only rented for 5 months, you will allocate your mortgage related expenses based on rental availability regardless of how long it was actually rented. Using the example information, you would allocate $9,000 (the months available for rent) to your rental property instead of $5,000 (months actually rented). TurboTax will automatically allocate any portion of the mortgage interest not available for use under the rental section (Schedule E) to your personal deductions section (Schedule A) in this situation.

To enter your rental mortgage interest  (for TurboTax Online sign-in, click Here) in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Business" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Business Income and Expense" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list or see more income)
4. Scroll down the screen until to come to the section “Rental Properties and Royalties”
5. Choose “Rental Properties and Royalties” and select “start’ (or “update” is you have already worked on this section)

Enter your rental property information through the TurboTax guided questions (or edit your rental property if it is already entered) until you come to a screen that is titled, Your "rental property name" rental summary.

Select to edit your rental expenses>I'll choose what I work on> click through several screen until you get to one titled "Report Mortgage Interest". Put your mortgage interest from Form 1098 here.

For any portion of your mortgage interest, insurance and property taxes related to your home use;

To enter your Mortgage Interest and Mortgage Insurance in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return  (for TurboTax Online sign-in, click Here), click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Deductions and credits”
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Your Home”
5. Choose "show more", then Mortgage Interest, Refinancing and Insurance and follow the onscreen instructions.  

To enter your Property Taxes in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Deductions and credits”
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Your Home”
5. Choose "show more", then Property Taxes and follow the onscreen instructions