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With the expenses already calculated by you, best advice is to enter them separately as you indicated, the rental portion in that section and the personal portion under the deductions section.
The key is to answer the questions appropriately in the rental activity under the situations that apply to the property so that you are taking advantage of all the appropriate expenses.
In your TurboTax Premier account follow these steps.
If you choose one above - enter your personal deductions using the steps below.
You can go directly to itemized deductions by following these steps:
1. Sign into your account and select your current return
2. Select My Account in the top Right
3. Select Tools
4. Select Topic Search (see attached image)
5. Search for itemized deductions and select Go
This will take you to the interview process for your mortgage interest and property tax deductions for personal use.
With the expenses already calculated by you, best advice is to enter them separately as you indicated, the rental portion in that section and the personal portion under the deductions section.
The key is to answer the questions appropriately in the rental activity under the situations that apply to the property so that you are taking advantage of all the appropriate expenses.
In your TurboTax Premier account follow these steps.
If you choose one above - enter your personal deductions using the steps below.
You can go directly to itemized deductions by following these steps:
1. Sign into your account and select your current return
2. Select My Account in the top Right
3. Select Tools
4. Select Topic Search (see attached image)
5. Search for itemized deductions and select Go
This will take you to the interview process for your mortgage interest and property tax deductions for personal use.
What if the property is a detached guest house on your residential property. Shouldn't the mortgage interest expense be only be a percentage of the total property square footage AND further reduced to reflect that it was rent ready three months after I bought the home and for a total of only 45 days? I don't see that TT offers an auto-allocation to take these kinds of factors into account. I wonder if selecting a different situation (single family home vs converted vs short term rental) matters for auto-allocation or if I should be manually allocating to reflect proper proportions for rental expenses and personal deductions.
You should determine the separate guest house basis from the total cost of the property. Allocate that as the basis for depreciation of the building itself. Since this is sort of a totally separate structture, you should compute the percentage for mortgage interest and property taxes to split between Schedule E, Rental and Schedule A itemized deductions.
Is this a short term, Air B-n-B type rental, then you have separate rules for those tpes of rentals
Generally, landlords filing 1040 or 1040-SR returns will report their rental income and expenses on IRS Schedule E: Supplemental Income and Loss.
However, if you provide "substantial services" to your tenants or your real estate business generates rental income, use Schedule C: Profit or Loss from Business. The same holds true for properties considered short-term rentals, i.e. properties with an average per-tenant rental period of less than 7 days.
Properties rented through a corporation or partnership (including LLCs taxed as such) report rent-related income and expenses on the business's return.
How can I tell if I'm providing "substantial services" to my renters?
Substantial services go above and beyond the basic services typically provided to renters (utilities, maintenance, landscaping, trash collection, etc.). If you’re providing hotel-like perks such as regular cleaning or maid service (in excess of 10% of the rental cost), fresh linens or towels, in-room coffee, transportation, or sight-seeing, you’re providing substantial services, and that means you'd file Schedule C.. See link for more information.
Should I Report My Rental on Schedule E or Schedule C
Please use this IRS Pub for additional information about Residential Rental
Residential Rental Publication
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