Why is TT not giving 100% deduction on rental property expenses?

[decook08]

I have a rental property that was rented for 85 days & used for personal use 8 days in 2024. IRS qualifies 100% of expenses tax deductible bc personal use meets the rule of not being "more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price." Why then is TT not giving full deduction, but is pro-rating the deductions based on 9% personal use?

[AnnetteB6]

TurboTax is following the IRS guidelines for a rental property that is used for personal purposes and as a rental.

The rule about the number of days of personal use being more than the greater of 14 days or 10% of the total days it is rented to others at a fair rental price is to determine whether the property qualifies as your home.

If it is not used as your home, then the expenses must be prorated between personal use and rental use, just as it happening on your return.

See the following links from IRS Publication 527 for reference:

Dwelling Unit Used as a Home

Not Used as a Home

[decook08]

Thank you, @AnnetteB6.

Where do I input expenses that I have incurred as a direct result of the rental  (for example: the short term rental permit fee). I am assuming this would be 100% deductible, correct?

[PatriciaV · Accepted solution]

Yes, you can enter expenses that are applicable only to the rental use. After entering your shared expenses, look for a page "Any Miscellaneous Expenses?" TurboTax will present a small table where you can enter a description and amount for these expenses. No allocation will be applied to these entries.

If you look at the Schedule E Worksheet for this property, Line 19 (Other Expenses) is grayed out for the allocation to personal use, confirming 100% goes to the rental use.

[decook08]

Thanks!!