First Year Rental, TurboTax is not letting me overwrite rental expense

[Curious_panda1]

Hello,

I lived in my primary residence from January 1, 2024, to March 31, 2024, and then rented it out for the remainder of 2024. TurboTax is trying to be "helpful" by prorating all my rental expenses. While prorating is appropriate for real estate taxes and insurance, I don’t believe it should apply to certain repairs and supplies.

For example, I purchased a dehumidifier specifically for my renters at their request. I have kept detailed records of supplies, utilities, and repair expenses incurred after my renters moved in. How can I ask TurboTax not to prorate these expenses and allow me to manually enter them as full rental expenses?

Additionally, TurboTax seems to cap my rental expenses to match my rental income, preventing my rental deductions from exceeding my rental income. From my understanding, rental deductions should be able to exceed rental income, with the excess carried forward as a passive loss.

However, I also own another rental property that was rented for the entire year of 2024 and had a net loss, which TurboTax correctly displays as a negative amount. Can someone explain why TurboTax is treating my partial-year rental differently and not showing a loss carry forward?

Separate but related question

I installed new windows, flooring, and a washer/dryer in August 2023, nine months before renting out my property. Can I depreciate these improvements, even though they were made before the rental period? If so, how should they be classified in TurboTax?

[AnnetteB6]

Double-check that you have not entered any personal use days under the Property Profile section and that you checked the box stating that you converted your property from personal use to rental use.  Personal use days are only considered after the date the property is converted to a rental.

Also, once the personal use days are out of the picture, you will probably need to prorate things like property tax and insurance yourself before entering it into the rental expense section.  From April 1st and forward, all of the expenses were related to your rental property.

As for the improvements made long before the property was put into service as a rental, you cannot depreciate these as a rental expense.  Instead, the cost of the improvements is added to the basis of the property and it will depreciated as part of the property itself.