Not-for-profit Rental Expenses

[rustyone]

Where are Not-for-profit rental expenses entered so they appear on Schedule A's Other Itemized Deductions? 

When entering them into "Other Deductions & Credits / Other Deductible Expenses", the entry doesn't appear on the "Sched A Other Itemized Deductions".

[tagteam]

"Not-for-profit Rental Expenses"

You can no longer claim any miscellaneous itemized deductions. Miscellaneous itemized deductions are those deductions that would have been subject to the 2%-of-adjusted-gross-income limitation. You can still claim certain expenses as itemized deductions on Schedule A (Form 1040).

See https://www.irs.gov/publications/p535#en_US_2018_publink1000208647

[rustyone]

How are expenses entered into Turbo Tax to offset not-for-profit rental income?

[tagteam]

You can enter expenses such as mortgage interest, real estate taxes, and casualty losses (those all wind up on Schedule A) but miscellaneous itemized deductions subject to the 2% AGI floor have been eliminated by the Tax Cuts and Jobs Act (TCJA).

[rustyone]

can income and expenses be entered on Schedule E as long as the expenses don't exceed the income?

[tagteam]

You cannot report on Schedule E if you do not rent your property to make a profit. By reporting on Schedule E, it would be presumed that you intend (or intended) to make a profit. Further, your property would be subject to cost recovery (depreciation) whether that is of any benefit to you or not.

See https://www.irs.gov/publications/p527#en_US_2018_publink1000219164">https://www.irs.gov/publications...

[rustyone]

I believe your comment implies that if the "rental income" exceeds the "rental expenses", then there is a "profit" in which case Schedule E can be used.  Correct?   

[rustyone]

Regarding Schedule E depreciation:  in my situation of renting out a portion of my home which is less than 20% of the total square footage, Turbo Tax does not calculate any depreciation expense on Schedule E.  This implies that there is some threshold below which, depreciation expense is not required (or perhaps even allowed).  Is this correct?

[gjoanne8]

I read that expenses are allowable up to the income.  Are mortgage interest and taxes included in “expenses?  Where do these expenses go?  I have the income on Line 21.  Thanks.

[ColeenD3]

In the past, you were able to take expenses on Schedule A as a  miscellaneous expense subject to a 2% of AGI deduction. That deduction was repealed with the tax reform.

Schedule A