I've already gotten some help with this but am finding more limitations with TurboTax Premier 2024 and a vacation home:
Situation: I have a primary and second home, both homes mortgage combined is >750,000 allowable personal limit which limits me to ~0.6 of all my interest. I also do short term rental of the second home (it IS a second home as I meet the 14 day/10% threshold of personal use). Per IRS Pub 527, worksheet 5-1 there is an ordering of expenses that are allowed to show a loss as well as how they carryover.
I paid ~45k of interest for the second home. I also used the home for 51 days and rented for 33 days.
I think, this is how it is supposed to work:
Normally allowable interest on second home = 27,000 (=45,000 * 0.6)
Schedule E Reported Interest = 27,000 * 33/84 (IRS Method) = 10,607
Schedule A Reported Interest = 27,000 * 51/84 (IRS Method) = 16,393
Now, because I report a LOSS, the allowed 10,607 is allowed, per pub 527 worksheet 5-1, to be a net loss (minus rent). However, since I report the loss, I should also get to claim any unallocated interest in future years from the rental portion of the second home interest, that is:
45,000 * 33/84 = 17,679 (total allocated to rental use)
17,679 - 10,607 (allocated limited interest) = 7,072 --> this should be carried forward to future years since I cannot have a "loss" more than my 10,607 per the IRS Pub 527 worksheet 5-1.
A) Is this all correct?
A1) TurboTax actually applies the whole 17,679 and allows it as a LOSS - I've already confirmed with the programmers this is an error
B) How in the world do I do this on TurboTax Premiere? It looks like the software just flat cannot handle second home mortgages >750,000 that are also rentals creating a net loss. TT doesn't include the worksheet 5-1 from Pub 527 to correctly calculate this. When I try to manually do the work and add it to schedule E, it is all hard coded on the ratios and the schedule E "worksheet" sections so I cannot bring the right values to the right spot.
