Rental Home Expenses

[alejousf]

Good Evening,

I had a home that was rented out from Jan 1st through March 6th 2021 as the lease for the tenants ended. In the process of the home being vacant.  Extensive repairs were made to the property for about 8 weeks.  The home was listed as a rental on 5/1/21 with no success of the home being rented out and at the same time I had a disagreement with the owner where I was living and made the home my permanent/primary residence on 6/1/21. 

With that said, I have paid property taxes for the year, HOA and interest rates on the mortgage loan through the end of 2021.

How do I apply these expenses for the months that the home was a Rental Property prior to converting it to my primary residence? 

[AnnetteB6]

Since your property continued to be a rental property up to the time that you converted it to your primary residence on June 1st, you will prorate the expenses between your Schedule E and Schedule A.

The HOA expense can be claimed as a rental expense for 5 months.  The remaining 7 months of HOA expense is a personal expense and is not deductible.

The mortgage interest and property tax may be split between Schedule E and Schedule A -- 5 months worth to Schedule E and 7 months worth to Schedule A.

As you work through the Rental Income and Expenses section of your return, be sure to check the box showing that you converted your rental to your primary residence.  TurboTax will give you guidance on screen about entering the expenses that can be prorated.

[Contented]

You will be asked how many days it was rented (include any vacant days that it was available for rent as well). 

[Critter-3]

You MUST indicate in the rental info section that the property was converted to personal use and then READ the screens carefully ... you did NOT have personal use days  WHILE the return was a rental so personal use days is ZERO ... again read all the screens carefully.   And to NOT let the program do the proration for you since this was NOT a vacation home rental ... do the math yourself.

[AmyC]

You may also want to review:

About Schedule E (Form 1040), Supplemental Income and Loss  &

Publication 527 (2020), Residential Rental Property - IRS