TurboTax home and business incorrectly taking 50% of rental income 1099

[psyadam]

I have 50% ownership of a rental property and Turbotax automatically allocates 50% of expenses, etc. However,  the management company sends me and my partner separate 1099s for the rental income, and now turbotax is  taking 50% of my 1099 for rental income, not the full 1099 amount. How do I override this please? Or some other accommodation aside from artificially doubling my 1099 amount, which would be inaccurate to what is sent to IRS?

Thanks,

Adam

[DianeW777]

The other accommodation is to enter both income and expenses yourself. The 50% allocation does become somewhat challenging.  TurboTax does ask if you want the software to allocate your ownership percentage and it specifically states 'Enter your total income and expense amounts and we will allocate...'. For this reason you can change the request and enter your expenses yourself or double the income to achieve the correct income for the year.  

Keep in mind that the tax return itself is filed with the IRS and not the background worksheets which are not required to be filed with a tax return, whether e-file or paper.

[psyadam]

So you are saying I can double the amount in my 1099 and it won't flag a discrepancy to the IRS because the worksheet showing the double amount isn't sent to them upon e-filing?

Have two other properties with same 50% so don't want to have to change things for consistency.

[AliciaP1]

While you still need to report that you only own 50% of the property, you can change the calculation of the allocation of income and expense to say you will split the costs - since the property management company has already done that for you.  To change this calculation please follow these steps:

1. Within your return use the magnifying glass to search Schedule E
2. Click Jump to schedule E
3. Answer the questions appropriately until you get to the We Can Automatically Divide Your Income and Expenses for You page
4. Choose No, I will calculate my own allocation for...(property)
5. Continue answering the questions and complete the Rental Summary with the costs for the property from the statement provided by the management company

TurboTax will no longer apply a percentage calculation to your amounts since you have told it you already applied the calculation before entering the data.

[psyadam]

Let me ask again to clarify:

So you are saying I can double the amount in my 1099 and it won't flag a discrepancy to the IRS because the worksheet showing the double amount isn't sent to them upon e-filing?

Have two other properties with same 50% so don't want to have to change things for consistency.

[ZoltanB45]

Do not enter income by filling in the 1099. Some businesses get hundreds of 1099's. They don't enter them in. In your case where you own 50% of the property, the 1099 amount creates confusion.  In the type of revenue page, select other, then type cash or checks and put the total amount the space generated for rent. When it is multiplied by 50%, it will be accurate.

[psyadam]

Won't that be a flag to IRS, that they will receive a 1099 from management company (as I have) and I don't fill it in on my turbotax?

[ThomasM125]

You should enter the form 1099 the way it is stated. As @AliciaP1 said, you can tell TurboTax to not automatically adjust revenue and expenses based on your percentage of ownership. So, you should enter the form 1099-MISC which reports your share of the rent income, then enter your share of expenses and everything will be correctly stated on your tax return.

[psyadam]

It's just that I have two other properties where it is allocated automatically, so guess i can redo this one. Not an issue having some automatic and some manually allocated across diff schedule c's?

Hard to assess when different people give me different responses.

[nharriott]

I've jumped to the schedule E and dont receive the prompt to enter my own expenses as opposed to automatically calculate. Can you please help?

[psyadam]

This is the second year I have owned this rental property. So when I switch it to 100% instead of auto allocation of my 50%, I have no clue on what to do with the depreciation, etc., as that is always auto calculated. Plus, afraid it will mess up previous 2020 tax year allocations. Can't this bug be fixed? I'm out of time, have to file and getting contradictory information

[PatriciaV]

The depreciation calculation is made separately from the allocation of expenses. As long as you indicate your actual ownership percentage for that asset, you should receive the proper amount of depreciation this year.

[Herve5]

I own 50% of a rental.

So I selected Turbotax to calculate my share of expense/income, and enter the full amounts.

Turbotax calcuates 50% on the income/expenses, but does not prorate depreciation expense on Schedule E line 18. 

If I manually overwrite by dividing by 2, Turbotax mentions I cannot file electronically if I overwrite.

How can I ensure the depreciation is prorated to my percentage ownership?

[Critter-3]

Ok ... do it this way ... you own 100%  of your portion of the rental.   So in the program you tell it you own 100% then you enter in your portion of the income and expenses ( do NOT let the program allocate anything ... do it yourself).  This way you are sure you are reporting your portion of the income & expenses correctly and you will enter in only your portion of the cost basis of the property to be depreciated.   Telling the program you only own 50%  is a recipe for disaster as you can see from the posts on this thread.