How does TurboTax handle part of home rental for part of time?

[Cangoal]

Let's say if I rented out 1 bedroom (3 bedrooms in total in a single house) for 3 months in last year.

How should I enter those info in TurboTax so that it will handle it correctly?

In the section "Tell us about your situation this year", I selected:

• First year rented
• Converted home to rental or rental to home
• Rented part of the home

Then in a later section "Was test rented every single day in 2021?", I selected "No" and then enter rental days and personal-use days for that single bedroom. 

Continue this process, and I didn't see any section to enter info about "footage percentage/ratio of the rental to the whole house". I am wondering if TurboTax actually handles this situation? (The option of "Rented part of the home" in a previous section seems indicated it should this situation)

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[AmyC]

Yes, the program will make calculations for part of the home rented. You did not convert your home to a rental. You simply rented out one bedroom. The program will do the math for you. This is how you should answer when going through the questions, single family, first year rented, I rent out part of my home, not rented all year and so on.

Alternatively, you could list the bedroom and make it a separate entity and do the math calculations yourself. 

[Cangoal]

@AmyC Thanks for the reply.

In the section "Tell us about your situation this year", I tried :

• First year rented
• Rented part of the home

as well, but I still didn't see any follow-up section I can provide a rental-use ratio.

I am aware of the alternative way which basically do my own math calculation. However, before that, I just wanted to see if TurboTax could handle this situation easily.

[ColeenD3]

No, TurboTax does not handle the situation easily. It is set up for either part of the house or part of the time. Doing both takes some work.

Please see this answer from Marketstar.

Mortgage interest and property taxes are divided between personal (Schedule A, itemized deductions) and rental use (Schedule E) proportional to the number of days used for each and square footage rented

Your formula is as follows: square footage of rental space/ total square footage of house times days rented/365 to be allocated as a rental expense

For instance, if you have $10,000 in mortgage interest and rent 25% of your floor space for 6 months, multiply 10000 x .25 x .5 = $1250 to allocate as a rental expenses. the balance as a Schedule A, itemized deduction.

So, you will enter a portion of mortgage interest and property taxes in both areas.

To enter personal mortgage interest and property ytaxes:

• Type in mortgage interest in the search box, top right of your screen
• Hit the Enter key
• Click jump to mortgage interest in the search results
• Follow the prompts and online instructions
• To enter rental expenses, type in rental property and follw the above instructions

Make sure you are past the blue Pick up where I left off button before you enter the above

[wuderak]

I used turbotax in 2021 when I rented out 66% but in 2022 I rented out 50%. Turbotax is still calculating it as 66%. How do I make the change to 50% in turbotax?

[AbrahamT]

Here's what you do, 

1- Go into the rental activity

2- In this screen, put in the number of days rented like this

Hit no

then ownership percentage in the next screen like this

 

It's actually 55% not 18%.

And then this, 

Good luck!

[EDIT 1/25/2023 11:00 AM PST]

[wuderak]

Thank you for the response but that was not my question. I always owned it 100%, but I rent it out partially. The part that I rent out changed from 66% in 2021 to 50% in 2022. Turbo tax is automatically calculating everything based on 2021. I need it to change the calculations to 50%

[AmyC]

So I am assuming you rent out part of your home and percentage changed from 66% to 50%. In the program you need to go 2 places:

1. go back through the Property Profile. 

1. continue through to the screen where you marked that you rent part of your home. 
2. The next screen asks a key question. Let Us Calculate Your Expense Deductions for You. 
3. If you choose the top option, you get a dropdown box to enter the percentage. Then you will enter full expenses into the program and it will take the 50% for you.
4. The bottom option does not give you the dropdown and you should enter half of your expenses.

2. Go to Assets / Depreciation

1. Go to your asset summary
2. Edit your house
3. continue, continue, continue
4. Change your percentage for 2022 use to 50%

@wuderak 

[enjohns]

I am having the same issue as the OP. I do not see either of these screens where Turbo Tax will say we can Calculate Your Expense Deductions for You. I have completely deleted my rental and started over. No place do I see a place to indicate that we rent 25% of our home. Where do I find this?

[HopeS]

The option is to enter your mortgage Interest, property tax, and other allocable expenses would be to enter them in the rental property section of TurboTax.  In the rental property section under your Property Profile, indicate that you rented out part of your home.

On the page, Let Us Calculate Your Expense Deductions for You, a yes answer will allow you to enter the entire mortgage expense and TurboTax will do the math for you based on the rental % of your home. If you choose this method, then you wouldn't enter the deductible personal portion again. TurboTax would transfer the personal portion to Schedule A.

All other expenses directly related to the portion of your home should be deducted 100% on Schedule E. Once you complete your return, review both Schedule A and E to ensure the expense allocations are correct.

@enjohns 

[wuderak]

I figured it out. Go to wages and income, rental properties add rental, by the "what type of property" click single family, then click "rented part of your home", answer questions until you come to "Want us to divide the rental-related portion of..." click yes, and then it will ask for percentage rented.

[enjohns]

Thanks! I tried it again and still wasn't seeing this so I deleted everything and started over in the rental section. I still wasn't seeing this and think the problem is that Turbo Tax wasn't giving me this option if I stated that I didn't rent the room for the entire year! I started renting 2/1. If I say the property was rented the entire year I do get the "Want us to divide the rental-related portion of..." but it does not offer that choice if I say it was rented for 334 days! 

[ianedlind]

Yes, I'm stumped for this same reason! Why isn't TurboTax asked about the percentage of the home that is used for rental when I didn't rent it the full year. In my case I rented for about 60% of the year and the rented portion of the home is 43%, but at no point am I asked to input the 43%.

Also, I'm getting an error during the Review. The system is saying:

Schedule E Worksheet: Days personal use should not be more than zero. You indicated this is an owner occupied rental property.

Huh? Yes, it is an owner occupied rental property and also, yes, I did have personal use more than zero.

[AmyC]

Let's start at the beginning. 

1. General property description: 
2. single family, continue
3. select: first year rented & rented part of my home, continue
4. select not rented all year, enter days rented which would be your 60% of the year- in days. Personal use of business space while available for rent - probably zero - click the learn more button, if needed.
5. continue, home office answer
6. Now you decide, do you want to determine the 43% or let the program. If you select Yes, enter 43%, otherwise, do the math yourself and select no.

@ianedlind 

[ianedlind]

Thank you @AmyC . It looks like you're using the Desktop version. I'm using the online version. It appears that there is no "Let Us Calculate Your Expense Deductions For You" screen where you would enter the Rental Use Percentage in the workflow. For me, it's not the First Year Rented  so I didn't select that option, but I tested the system with that option selected and it still didn't prompt me with the page where I could enter the Rental use percentage.

In prior versions of TurboTax online, I have absolutely entered a Rental Use Percentage; this is different.

With all of that being said, I could manually make the 43% calculation for all of my rental expenses. However, despite what I enter, the system changes the expense values to $0. Then, during Review, I'm getting that Schedule E Worksheet error message I mentioned in my previous post.