1099-INT for a Schedule E rental property

[hameshatumkochaha]

I searched but two related threads are not the same.  This is the situation:

1. I rented out my old home for H2 of 2022, getting me ~$17k income (1099-MISC) and say ~$30k expenses (upgraded $14k + depreciation ~$16k)

2. I opened an account with a bank to collect the rental income and they gave me a $530 bonus against the rental entity on the 1099-INT form

Questions:

1. Where on Schedule E can I report $530 income from 1099-INT for the rental entity?  

2. TT is not giving me negative bottomline for Schedule E for some reason.  It is capping expenses + depreciation at the $17k 1099-MISC value.  How do I report the loss for Schedule E?

Thanks,

[InHisName]

If you are a corporation or a "doing business as" then those forms do have where interest 1099-INT goes.  For an individual, in my return they all go as my personal interest.

On a schedule E there are just a few kinds of income that can be reported.  Rents (7 kinds), and Royalties.  I do not see any place for the INT to go with out being organized as separate rental operation. (Corp or "doing business as", both start on the sched C first)

Loss reporting is very limited in last 2 decades or so.   Gross income must  be below 100K and some other rules. Like hours of participation and such. Also limited to 25k loss max.  A sliding partial loss allowed up to 150K.

If you have losses, they carry forward to years that have more profits to offset them.

[DavidD66]

You don't report the 1099-INT interest on Schedule E.  You report it just like you would any other interest income you received,and it will be reported on Schedule B, and your 1040.  

If you're expenses are being capped, you may be treating your rental like a vacation rental.  If you entered half the number of days in the year as personal use, and half as rental, the program will treat it like a vacation home with personal use and limit your deductions.  If the property was a dedicated rental for the second half of the year, don't enter anything for rental days and personal use.  You then enter 505 of your property tax, mortgage interest, etc. the expense amounts for the rental.  And as mentioned by InHisName if your MAGI is above $150,000 your losses will be suspended and carried forward until you have passive income to offset, or sell the property.

[hameshatumkochaha]

Thanks for the responses. 

0. I will double-check but I think the property was rented out for about 175 days.  Is this information important?  Is there some limit that 50+% of the days in the year the property had to be rented?  I hope not. 

1. I did not understand what you meant by 505 in "You then enter 505 of your property tax,"

2. Hopefully, if all goes per plan, we don't anticipate our MAGI to reduce below $150k in the coming decade(s).  In such a case, is there a limit for how many years would my "losses will be suspended and carried forward until you have passive income to offset, or sell the property"? 

3. For the losses to continue to carry forward, is there something I should be careful about i.e. inadvertantly, I don't want to change an answer to a question from yes to no or no to yes and lose the ability to eventually take the loss.  

4. Lastly I did not catch exactly on which page would I be able to enter no number for the number of days the property was rented.  "If the property was a dedicated rental for the second half of the year, don't enter anything for rental days and personal use."  I will look but yes, you are right, I had entered the number of days the property was rented as a value somewhere during the preparation.  If I was "treating your rental like a vacation rental", then by making the change, what type would I be treating it like after entering nothing in the number of days entered?  

5. Say I sell the rental home in Feb 2024.  Say my Sch E income then is $6k and expenses are say $1k and depreciation is $10k and carried forward losses are say $20k.  I would qualify for actually reducing my income independent of MAGI being above $150k by $6-1-10-20 = $25k?  

What I want to ensure is I don't click somewhere incorrectly and lose the ability to continue to carry forward losses until the day of sale.  Is there a specific question / answer to be watched carefully for future Sch.Es?  

Thanks again for all your help! 

[AmyC · Accepted solution]

1. Dave is making sure that you marked the house as a rental and did include your personal use days during the time it was a rental. That will give you a wrong calculation.

2. 505 should have been 50%. If you lived in half the house and rented half, you would claim half the expenses.

3. The losses continue generally until the house is sold. There is more to the story, as always. See Publication 925, Passive Activity and At-Risk Rules and About Form 8582, Passive Activity Loss Limitations.

4. If your old house was a single family, select that. Enter the date places in service, the number of days available for rent. For personal use, this is the number of days you and your family used the house while it was a rental.

Follow these steps:

1. Return to the rental section
2. Edit
3. Summary screen
4. Select Property Profile
5. continue to What Type of Rental is This? Select single family if this is just a house rented to one family.
6. continue
7. Any of these situations? Select converted from personal to rental in 2022
8. continue, continue
9. Select rented all year or not
10. Enter days available for rent
11. Enter personal use days

5. Yes. Losses are claimed at disposal.

6. No, program knows to carryover. Form 8582 will be present.

[Mike9241]

unless incorprated that interest is personal interest reported on 1099-INT and not schedule E.