Tiny House land rental

[tenacitytravels]

I rent out 1/2  of my yard to a Tiny House on Wheels and provide utilities to them.

Where do I enter this income in Turbotax and what expenses can I  deduct?

I've had to put together a new lease an correct items (gravel pad, line to sewer) that were directly related to upgrading the  Tiny House land where it's rented. I can't find any information about this type of land rental and would appreciate any guidance.

[Critter-3]

All rentals go on a Sch E.

[Hal_Al]

Land is not depreciable, so you get no deduction for the land itself. 

You may deduct the a proportion of your utility bills.  You have to estimate their share of those charges, Comparing before and after bills would be one way to do that. Yo may also deduct a proportion of your real estate tax and mortgage interest.

You may depreciate the cost of the land improvements  (gravel pad, line to sewer)  over 15 years. Consider them 2 separate assets.  

[tenacitytravels]

Is there a walk through of which options you choose on Turbo Tax regarding land rentals?

I'm having a hard time understanding which items in the rental flow relate to land only.

Thank you.

[Hal_Al]

One of the first questions your are asked is "What Type of Rental is This?"

You select Land.  The the interview asks you specific questions.  What specific questions are you having trouble with?

[PattiF]

For the Tiny House land rental, you will have the income from the rental.  The upgrades to the land for preparing the property for the rental would be entered as improvements and should be depreciated. Other expenses would include an increase in the cost of homeowners insurance; and a portion of the property taxes, utilities, and trash removal fees.

Here is a TurboTax Help article for rental property.

This lists the expenses that you can use on Schedule E. Your situation is different as you do not have the usual rental expenses such as depreciation for a building.

@tenacitytravels

[tenacitytravels]

Since I live in the house which is on the other half of the lot, how do I show it's half the expenses?

Do I choose the "I live  in one unit"  to get Turbo tax to divide things  in half? I had to enter the land cost, but what does Turbo Tax do with that information? I think it's depreciating it, but I know that's not correct.

[AmyC]

The easiest thing to do is to treat the tiny house rental as a rental all by itself and you do the math.  A tiny house compared to your house would not be a 50/50 split.

Land & property tax:

Take the value of the land and multiply it by the percentage that is rented out. Land is not depreciated but if you added improvements to prepare the land, those items can be depreciated.

Utility bills:

One way to prorate is to take the square footage of the tiny house and divide it by the square footage of your house. The trash bill can be prorated and may be 50/50. You can choose another method of prorating, keep records and keep it consistent in case of audit. If you have a family of 10 and 1 person in the tiny house, 50/50 wouldn't be right. The utility bill should be separate. If not, prorate it like the trash.