Entered amounts differ when I compared rental information side by side with past year

[tardiles]

Hi I used Turbotax for our taxes in 2021 for one rental property. Entered our expenses this year correctly and triple checked, but when I put them side by side with 2021, the Real Estate Taxes and insurance amount differ with what I entered.  Is this a glitch or my tax ignorance? Thanks

[SantinoD]

It is common for the expense amounts from the previous year are different.  Insurance rates could have gone up or down and Real Estate taxes also could have changed. There could have been supplemental property tax (which doesn't happen often) last year. 

I recommend going back and checking your records to confirm your amounts.

And to be sure you don't miss anything, here is a link with common rental expenses you can deduct: What kinds of rental property expenses can I deduct?

[tardiles]

Hi thanks for your reply. I have triple checked the amounts.  Is it possible because I was a partial resident of the state where I own the rental?  I flagged that portion before I file and I won't until I find clarity, but it passes all the checks from the Turbotax software. 

Thanks

[AnnetteB6 · Accepted solution]

No, being a part-year resident of the state where the rental is located should have no bearing on the information being reported on your Federal return.

Take a look at the Property Profile section for your rental property.  If you were in a situation where the property was converted to personal use from rental use or vice versa, then you may have mistakenly entered that there were some personal use days during the year.  Personal use days do not include any time just prior to or just after a change in the use of the property.  If personal use days were entered, then expenses such as real estate taxes and insurance will be prorated.  

If you did not have any personal use days reported, please let us know how you are comparing 2021 and 2022 information.  Are you looking directly at Schedule E or using a summary of the information provided within TurboTax?

@tardiles 

[tardiles]

Thanks @AnnetteB6, that fits more with what I am seeing.

In 2022, we adjusted the rent price. We had kept it below market for a number of reasons, we didn't want to increase during the pandemic. Anyway, Turbotax asked if the rental was used below market price, to which I considered about a third of the year significantly below market price. So, it may have taken those days as of personal use, although we had it rented for cheap. I am not sure why this would penalize us for renting it cheap. This answer makes the most sense, and I was looking at the Turbo Tax comparison tool.

thanks, I hope you can follow up after my reply. 

[GeorgeM777]

Following up on the post from @AnnetteB6, yes, renting the property at below market rates would be considered personal use by the IRS.  In situations of the type you describe, the IRS states the following with regard to what you can deduct and how much you can deduct:

If you use the dwelling unit for both rental and personal purposes, you generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose. You won't be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, casualty losses, and rental expenses like realtors' fees and advertising costs). However, you may be able to carry forward some of these rental expenses to the next year, subject to the gross rental income limitation for that year. If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you may still be able to deduct your personal portion of mortgage interest, property taxes, casualty losses from federally declared disasters, and rental expenses on that schedule.

Renting Residential and Vacation Property

@tardiles