reporting second home for Schedule E

[RustyShackleford]

We converted our short-term rental to a second home in 2024, so it's just a second home for all of 2025.  We did rent it for one one day for $120.   My understanding is that we don't have to report this rental income, but we also can't take any expenses on the home on Schedule E (but can deduct real-estate taxes and mortgage interest in Schedule A).

But I'm confused about how to enter this in Turbotax.   If I say that we rented for 1 day and used for personal use 16 days (an estimate),  and enter the rental income and also the expenses, it actually deducts 1/17 of the expenses from the rental income and gives me a Schedule E loss.   

This seems completely contrary to the rule I quoted in the first paragraph.   Should I instead say I didn't rent it at all, and let Schedule E be deleted ?   (I've kept my own records of depreciation during the period it was a short-term rental, so don't need Schedule E for that).

[MindyB · Accepted solution]

Under IRS Section 280A, commonly known as the "Augusta Rule", you are correct that because you rented the home for fewer than 15 days, the income is non-reportable and the associated rental expenses are non-deductible. Since the $120 isn't necessary to be reported, you should delete Schedule E for this property so that your mortgage interest and property taxes flow correctly to Schedule A as second home deductions.

See: 10 Tax Tips for Airbnb, HomeAway & VRBO Vacation Rentals for information you may find helpful regarding the 14-day Rule.

[RustyShackleford]

Ok, thanks, but if I don't have Schedule E the mortgage interest and real-estate tax can't "flow" to Schedule A.  So I guess I just simply enter them for Schedule A the same as I do the interest and RE tax on my main home.

[MindyB]

@RustyShackleford, correct, if you never entered the info into the regular itemized deductions, then yes you should do that now. And remove any Schedule E input.