Can I put down as an expense, the $300 per month that I'm paying my realtor to be my property manager? And what would I need to show this?

[Carl]

Property manager for what? Do you own rental property?

[djlimole]

Yes. I relocated and am renting my former home out.

[Carl]

Then "EVERYTHING" concerning the rental is reported on SCH E as a part of your personal 1040 tax return. First a few warnings since I note you're using the Online version of TurboTax Premier.
 - DO NOT register or pay your online TurboTax fees until you are *COMPLETELY* finished with your taxes. Once you pay, you flat out can not elect the option to "start over".
 - As a first time landlord, I have no doubt that you *will* be starting over more than once. It's how you learn how this program works. 99% of what I know about the program is what *not* to do, and I didn't learn it, by not doing it. Same will hold true for you.
 - When you get to a point where it's time to "start over", on your left select Options, then Tools, then the "clear and start over" option. Note that when you do this, it will clear your 2018 tax return *ENTIRELY* and you will be starting over from scratch. Expect this, and expect to need to do this more than once. You don't learn this stuff through osmosis.
As you work through the rental, you'll find that there is a specific box in the rental expenses section for "management fees". Be careful here. If your property manager issues you a 1099-MISC with what they paid you reported in box 1 of that 1099-MISC, if the amount in that box does "NOT" include the management fees they withheld from the rent before paying the remaining rent to you, then you do "NOT" have any management fees to claim. Gotta be careful that you don't double-dip here on the deductible rental expenses.
Now, below in the answer box is information that I already know you will "NEED". It provides clarity where the program does not. But one thing I do want to point out when working this rental property through for the very first time is this:
PERFECTION IS NOT AN OPTION! IT"S AN ABSOLUTE MUST!
Getting even the tiniest thing wrong in that first year has a very, very high potential of becoming exponentially worse as the years pass. Then when you catch the error a few years down the road (if the IRS doesn't catch it first) the cost of fixing that error will be *expensive*. So if you have any questions, please ASK!. The only stupid question, is the one you didn't ask. Remember, since this is your first time dealing with a rental property, perfection is NOT an option.

[djlimole]

Wow! Thank you so much for that detailed response. I really appreciate your time and effort!
I'd like to run something else by you, if you don't mind. My rent is paid to me directly from the tenant via wire transfer to my checking account. And I pay my property manager his fee directly using the same method. There also is no 1099-Misc involved. Will this be a problem?

[Carl]

I don't see a problem. But why is a 1099-MISC involved? The manager has no reason I can see to send you a 1099-MISC, since the renter pays you directly and there is no middleman between you and the renter. So I'm unable to see where a 1099-MISC would be involved.
Please note that you are *NOT* required to issue a 1099-MISC to your property manager, unless you are paying an "individual" more than $600 in a tax year. If you are paying a property management "business", then it doesn't matter how much you pay the business, you are not required to issue a 1099-MISC.

[djlimole]

There is NO 1099-MISC involved. And I AM paying him more than $600 in the tax year. He is a realtor, but does not have a property management business. So I am paying him, an individual not a business. So I'm thinking that I can not write off the monthly payment that I'm paying him.

[Carl]

Yes, you can write it off as a rental expense. As you work through the rental expenses section there is a box labeled "management fees" and that's where you claim it.
Also, if I interpret one of your above comments correctly, you're paying $300 a month in rental management fees. Unless you're charging $3000 a month rent, that is gawd-awful high for a management fee. The standard is 10% of the rent paid each month, and the property manager only gets their 10% cut in months the property is actually rented out.
If you are paying an individual more than $600 in the tax year, then you will need to issue that individual a 1099-MISC. You can't do that with the Premier version of TurboTax though. You either need to upgrade to the Self-Employed version, or you can do it online with an account you create at <a rel="nofollow" target="_blank" href="https://quickemployerforms.intuit.com/signin.htm">https://quickemployerforms.intuit.com/signin.htm</... copy that goes to the IRS can be sent electronically, and you'll need to print the copy you are required to send to the individual.
Now to do this, you will "require" either the SSN or the EIN (Employer Identification Number) of the person you will be issuing the 1099-MISC to. They are required by law to provide it. Now I'm sure you can understand one's reluctance to share their SSN. So inform your property manager that they can obtain an EIN free of charge directly from the IRS at <a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-n...> and it only takes about 10 minutes.
"RIGHT NOW" you may need to send your property manager an IRS Form W-9 (<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/fw9.pdf">https://www.irs.gov/pub/irs-pdf/fw9.pdf</a>) to get the SSN/EIN that you require, in order for you to complete your taxes on time. Read the instructions included with the referenced form. If the 1099-MISC is required to be issued, then you are also required to keep the W-9 on file once it's completed by the manager and returned to you. You will need that information every year you pay that property manager more than $600.
As a good practice, anytime you hire an individual to manager your rental property, you need to make it clear to them that they don't get paid until you have a completed W-9 from them.

[djlimole]

Got it! I've got another question if you're up for it. I'm in the Rental Expense section of TurboTax. It's asking me to put down totals for Insurance and Property Tax. Do I put down half of what I paid because I lived there for 6 months and rented it out for 6 months?

[Carl]

It depends on what you told the program to do earlier. You can choose to do the splits yourself, or you can choose to enter total amounts and have the program do the splits for you. If you chose the latter, the program can only do so much and it doesn't seem to split everything from what I've seen over the years on past experience.
Since it was your personal residence prior to being rental property, that means those deductible expenses incurred during the time it was your residence are claimed on SCH A, and for the time it was rental are claimed on SCH E. Now for the first two expense screens it gets tricky.
 - Property insurance is not a deductible expense for the period of time it was your residence. Property insurance has never been a deductible expense on your residence or 2nd home. So you need to pro-rate the amount you enter for the rental.
 - Property taxes are deductible no matter what. If you elected to have the program do the splits for you, then enter the total amount paid for the year and the program takes care of the splits. You'll be able to check this later to confirm that the program did "in fact" to the split for you.
 - Mortgage interest. It's important to read the screen. I can't stress that enough. If you chose to have the program do the splits for you,  you'll enter the entire amount of mortgage interest you paid in 2018. You'll be able to confirm the program did the splits later.
For all other items in the rental expenses section, you enter only what was paid during the period of time the property was classified as a rental. That's because things like cleaning/maintenance expense are only deductible for the period of time it was a rental. So there's nothing for that item to split with the SCH A.
After you have totally and completely finished the rental expenses section, if you need help confirming any splits took place just let me know and I"ll talk you through the process. This will have you "jumping around" in the program so my explicit navigation instructions may not be "spot on" since you're using the online version of TurboTax. I myself use the desktop version as I have a problem with storing my personal information on a privately owned computer that I have no control over.

[djlimole]

Thanks again buddy. I'll let you know if I run into anything else. Right now, I've already done what you said regarding the splits. I did it myself. For some reason, I'm sure you'll be hearing from me:)

[djlimole]

Just went to finish up my taxes and got a message that I can't e-file my state taxes because of "massachusetts schedule c, profit or loss from a business, has a foreign address"! It says I have to file by mail. Any thoughts on this?

[Carl]

Since rental property is not reported on SCH C, what is your other business? Or did you start the rental stuff on SCH C and just stopped after becoming aware that was the wrong place to report it? Basically, I'm wondering why you have a SCH C at all.

[djlimole]

I'm not sure, I have no other business. I put in my rental stuff where I was prompted to do so. I can look into it more and find out. I have not completed the return, so I can go back and change where I input it. I'll check it out and let you know. Thanks again Carl.

[Carl]

"I'm not sure". Huh? Surely you "KNOW" for a fact that either you have your own business and are self-employed, or not. Under the Personal Income tab scroll down the Business Items and elect to start/update Business Income & Expenses. If you see a business listed there (probably called "untitled") just click the delete button next to it, to delete it.