Sharing a new home equally with 2 other tenants - Days Rented vs Personal Use

[hogwell]

If I purchased a home mid-year (e.g. in May) and also rented to two other tenants to share the home evenly  with me, how do I answer "Was This Property Rented for All of 2019?" on the Schedule E Worksheet in TTAX19?

"Days Rented vs Personal Use days" (Sched E line 2)

I bought the home on May 17 and advertised for housemates immediately.  Do I enter 365 days rented and 0 personal days (i.e. indicating the whole time I owned it), or do I enter the actual number of days I owned the new rental and 0 personal days? (The help on this entry only talks about part-time vacation homes.)

It's confusing.

[MarilynG1 · Accepted solution]

Enter '365 days' of Rental Use.

What this means is that during the time the rental was available for rent, there was no personal use. 

[mateam]

I'm in a similar situation. I bought a house in June 2022 and am living in it and renting it.

I answered "Yes" to if it was rented every single day in 2022 (since it was rented every day I owned it) but when I go to file my taxes, Turbo Tax keeps saying the days owned (June-Dec) need to be greater than the days rented (365). I'm trying to update 365 but can't seem to.

How do I fix this?

[AbrahamT]

When you enter the property information in Property Profile, you will put in the number of days rented calculated to be 213  June through December of 2022. Don't put in anything for Personal use days like this;

The reason you don't have to enter any personal days is because you didn't have any. All the days you owned it was rented, namely 213.    Then, the information flows through seamlessly to the forms like this

with no error messages showing up.

Experiment this and see if this works for you.

Any further questions, always feel free to to get back to us.

[Carl]

When renting a part of your primary residence that you own, the rental percentage is that percentage of the property that is "exclusive to the renter". Assuming you rented out rooms that were exclusive to the renter(s) for the entire tax year, the days it was rented would be 365, and the days of personal use would be zero.

Also, check the depreciation taken for that first year by figuring it manually and comparing it to what TurboTax figures. My bet is, Turbotax will be wrong by quite a big margin. If it is, post back and I'll help you make the program figure it correctly so you won't have to over ride, thus invalidating the 100% Accuracy Guarantee and disabling your ability to e-file.

To figure the depreciation manually, use IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf. Use the MACRS worksheet that starts on page 37. The table that applies for this is table A-6 on page 71.