topic Allocation of Property Tax Between rental expense and personal expense in Deductions & credits

Allocation of Property Tax Between rental expense and personal expense

rangermom — Wed, 02 Feb 2022 19:50:58 GMT

I rent my primary residence as a part-time vacation rental during the summer. When entering my property taxes, the allocation to rental expense is correct but the allocation to my personal deduction is listed as a vacation property, not taxes on my primary residence. If I override the allocation and delete the taxes for a vacation property and allocate it to my primary residence, I get an error message on my Federal review. How do I fix this?

Re: Allocation of Property Tax Between rental expense and personal expense

DianeW777 — Wed, 02 Feb 2022 20:06:19 GMT

It can be listed as vacation property. It's not important for the deduction to say primary residence, even if it is. You are allowed to deduct property taxes on any property that you own when it comes to itemized deductions. The only limitation is a standard $10,000 maximum for state and local taxes in this category of itemized deductions.

Re: Allocation of Property Tax Between rental expense and personal expense

Anonymous_ — Wed, 02 Feb 2022 20:11:07 GMT

@rangermom wrote:

.....the allocation to my personal deduction is listed as a vacation property, not taxes on my primary residence.

Ensure that you are entering your property taxes in the Real Estate Taxes box and not Other Taxes.

The amount not allocated to rental use, will be allocated to personal use and appear on Schedule A, and Schedule A will appear in your list of forms only if the total of your itemized deductions exceeds your standard deduction.

Re: Allocation of Property Tax Between rental expense and personal expense

rangermom — Wed, 02 Feb 2022 20:13:33 GMT

If the amount stays under vacation property, it increases my total taxes required. If I move it to primary residence it decreases my total taxes required. Obviously, I want to decrease my taxes but I also want to fill out our taxes correctly.

Re: Allocation of Property Tax Between rental expense and personal expense

Anonymous_ — Wed, 02 Feb 2022 20:15:34 GMT

Please explain what you are looking at (which form or schedule) and where you are entering the property tax figure.

Re: Allocation of Property Tax Between rental expense and personal expense

rangermom — Wed, 02 Feb 2022 20:19:01 GMT

You're right. For some reason it is now showing on my Schedule A even though it's listed under Vacation property.

Re: Allocation of Property Tax Between rental expense and personal expense

Mike9241 — Wed, 02 Feb 2022 20:25:15 GMT

was it rented for less than 15 days?

- the tax rules say in that case treat the residence as all personal. you do not report rental income or rental expenses. thus all mortgage interest and taxes go on schedule A

if 15 days or more you prorate mortgage interest and taxes and other expenses - personal potion of taxes and interest get reported on Schedule A

rental portion of interest and taxes not limited to rental income, other rental expenses are limited to remaining rental income if any, are subject to ordering rule, but carryovers are allowable.