To get the deduction for your active short-term rental in TurboTax, follow these steps:
Set Up State Information:
- If your rental property is out-of-state, first set up that state in My Info (TurboTax Online) or Personal Info (TurboTax Desktop).
Enter Rental Property Information:
- Open or continue your return - Be sure you are logged in for link below to work.
- Navigate to the rentals section:
- TurboTax Online/Mobile: Go to rentals.
- TurboTax Desktop: Search for rentals and select the Jump to link.
- Answer "Yes" to the question "Did you have any income from rentals or royalties?"
- On the next screen, select any options that apply to you regarding being a real estate professional.
- Select "Rental property" and continue.
Indicate Material Participation: If you materially participated
- Ensure you indicate that you materially participate in the rental activities. This is crucial for qualifying as an active rental.
- Answer questions about your involvement in managing the property, such as handling bookings, cleaning, and guest communications.
Enter income and expenses:
- Enter all rental income received.
- Deduct expenses such as:
- Mortgage Interest
- Property Taxes
- Operating Expenses (e.g., cleaning fees, utility bills, supplies, insurance premiums)
- Advertising and Marketing Costs
- Repairs and Maintenance
- Depreciation
Nonresident State Return:
- If filing a nonresident state return for out-of-state rental income, complete the nonresident state return before the resident state return.