I do not have a schedule C. I owned couple properties and self-managed the properties: collect rent, repairs, maintenance, background check etc.
My understanding is home office is put under line 19 – under “Other Expenses” for schedule E per the Curphey vs Commissioner ruling and other research (CPA).
1) Does it matter if it’s under the traditional method (home office % of house), not the simplified method ($5 x sqft). Do I need to fill out any other forms?
2) Do I put all the home office expenses cost under 1 property or split 50/50?
3) Given I declare a qualifying home office (tax home), can I still include mileage expenses to the rentals (maintenance, etc..)
I'm going to page @AmeliesUncle for this but, first of all, note that your rental activities must rise to the level of a trade or business and that's a tough argument to make with a "couple properties".
Regardless, you definitely would not file other forms, such as Form 8829 as that form is strictly to be filed with Schedule C.
As Tagteam mentioned, you would first need to confirm that the rental activity rises to the level of a "business" and that the office is used "regularly and exclusively". Personally, I would think it would be unusual for a person with two rentals to meet those requirements.
But if you meet those requirements, in answer to your questions:
1) I think either method would be allowed.
2) Split between properties.
3) If your home is your "principal place of business", then the miles should be deductible.
Thank you @AmeliesUncle @Anonymous_
Since I am deducting the mortgage interest from my home office in Schedule, so I manually deduct the interest in Schedule A?
For example, say there is 10000 mortgage interest. 10% was for the home office, which equals 1000.
I put 1K in Schedule E, then 9K in Schedule A? Schedule A is picking up the full 10K mortgage interest based on the 1098 provided by the bank. Do I adjust it on the 1098 portion, or manually change it in schedule A? Do I need to click on something on the program? Thank you so much again.
@buns2 wrote:
I put 1K in Schedule E, then 9K in Schedule A?
Do I adjust it on the 1098 portion, or manually change it in schedule A?
Yes.
Either way is fine. The 1098 is not actually sent with the tax return, so as long as Schedule A shows the correct amount, you are good.
I have a residential rental home. I live in another property. Can I add home office deduction in Schedule E? If yes, where & how can I add it in Turbo Tax?
How do I know that the rental activity rises to the level of a 'business' in order to qualify for home office deduction?
A home office can be used for a rental but only if it qualifies as an established business. There has to be self-employment income generated in order to take advantage of a home office deduction.
That is not to say that you can't deduct office expenses for your rental business. But in order to get that 'home office' with the $1500 safe harbor and whatnot you need to have an established business. Then your rental is reported on schedule C and you qualify for the home office deduction but you also pay self-employment taxes on the income.