how to allocate the Property Taxes portion of registration fee among 2 rental properties with one vehicle

[LLL2010]

I use one vehicle for 2 rental properties:

The total property tax portion of the registration fee for the car is $1200

The total miles for the car is: 4000

Miles for property A is 1000, business percentage:25%

Miles for property B is 1000, business percentage:25%

Under "the car and truck Expenses worksheet":

For property A:

4c Total Miles: 4000

5. Miles for business: 1000

8. Percent for business use: 25%

26. 1000*0.545 = $545

27. Additional Expenses:

d. The property tax portion of the registration fee for the car = $1200

e. less person portion = ($900)

28. Total Expense:  $845

For property B, everything is the same as what I did for property A

The allocations for the property tax portion of the registration fee seems all correct!

But when I look at Schedule A, 

5c) State and Local Personal Property Taxes: Turbo Tax put: $1800

Which is wrong, because Sch A (5c) supposed to be the non-business portion of the personal property taxes we paid on the car, which should be 1200 - 300 - 300 = $600, or half of $1200.

So, I am very confused about how to allocate the expenses on the "Car and Truck expenses worksheet" for the two properties with that use one vehicle.

Your help is greatly appreciated!

--Li

[lasbanas1]

You did all the work.....don't use the work sheet.....just enter the amount of car expenses for each rental property.

[LLL2010]

Thank. But I did not use the worksheet, I just enter the number of car expenses for each rental property using the step by step version of the Turbo Tax. I use the worksheet to post the question so that people can understand what I am talking about

[lasbanas1]

If you use the regular windows edition of TT Deluxe you can enter the numbers on your Sch E worksheet in forms......forget the interview.

[LLL2010]

Thanks! But it does not work. The form for the SchE for property A is called Sch E Wks (property A), and the Auto Expense (6a) can not be filled, it is generated from the "Car and Truck wks". I entered the forms with the numbers as I explained in my question. It won't solve the problem.

I think it is a bug in Turbo Tax Delux.

Please help!

Thanks

--Li

[LLL2010]

On the form "Car and Truck wks", (no matter using interview, or using the form version directly)

For property A:

27. Additional Expenses:

d. The property tax portion of the registration fee for the car = $1200

e. less person portion = ($900)

This (e) with ($900) is generated from Turbo Tax because

the non-business portion of the property Tax of the car is 1-1000/4000=75%, and 75% of $1200 property Tax is $900

So, for the property (B), the non-business portion of the property Tax is also $900.

And therefore,  900 + 900 = 1800, and therefore, Turbo Tax automatically put $1800 into Sch A (6c) as the non-business portion of state and local personal property Tax. But as I said before, this is wrong. Because clearly, the non-business portion is 50% of the $1200, which is $600.

[lasbanas1]

Go back through the vehicle section and delete everything you entered and start over after deleting the car and truck work wks in forms. Now you should be able put in the amounts on 6a in the Sch E wks on that form.

[LLL2010]

Thanks a lot!! Let me try this way!

Thanks

--Li

[LLL2010]

Thanks a lot! It worked! 

Since Turbo Tax Delux has a bug here, I guess I can only do it manually by deleting the Car and Truck wks, and enter the auto expense manually.

Thanks a lot! --Li

[pk]

@LLL2010   since you are reporting both the properties on schedule-E , you can (a) include the mileage for property A   under its expense and ditto for property B;   (b) you either use standard mileage rate  or you have to allocate  real expenses  between  1. personal , 2. Property A and 3. Property B -- you cannot use registration fees  and mileage  for the same asset.

Personally, I would keep it simple  and use the standard mileage rate  ( unlikely IRS would challenge that  as opposed to actual expenses ) and  bin the mileage between the two properties, especially  if they are not in the same neighborhood ( but you need to have actual contemporaneous records, just in case you get challenged ) -- a daily log with dates and miles would be good.

Does this help, or you need more ?

[LLL2010]

Thanks a lot! It is very helpful! --Li

[LLL2010]

"Go back through the vehicle section and delete everything you entered and start over after deleting the car and truck work wks in forms. Now you should be able put in the amounts on 6a in the Sch E wks on that form."

I did this successfully, and this did correctly with my Sch A. But my Turbo Tax is not perfect anymore because it will not have my new car information, for example, this car will not be on the depreciation worksheet anymore. Do you agree with me that this is a bug in Turbo Tax Delux when there are multiple properties using one car? Can you help me think of another way without having to manually delete the car and truck wks?

[Critter]

You really need to upgrade to the LIVE assistance so you can get guidance from someone who can see your return and walk you thru the entries needed in real time ... this is not something the program does automatically or well so a workaround is needed. Also you can just put all the auto expenses on one rental property since it all comes out in the end. Also for such little mileage I am surprised you just don't use the standard mileage rate ... actual expenses may not be the best choice.

[Critter]

And what state do you live in where a registration fee is $1200 ? Are you including sales tax on a new car in that figure ? Or personal property taxes ?

[LLL2010]

Thanks! But, I am actually using the Standard Mileage, not the actual expenses method.

How do I put the expense in one rental?

Do you mean

Option (1) Put the Mileage for property A to be the total mileage of the property A and B

Put the mileage for property B to be 0?

Or do you mean:

Option (2) We keep the mileage for property A, and property B as they are, just put the property Tax portion of the Registration Fee under property A, and do not put any property Tax for property B?

But if you mean option (2), then, we only get 25% of the Property Tax of $1200 because the business proportion of property A is 25% if we do not change the mileage.

If we use option (1), then, it will look very different what filed in previous years. Because in previous years, I always split the mileages among the properties according to the mileage log.