RENTAL INCOME ALLOCATION OF MORG INT AND PROP TAX

[HOPE2]

Hi to all. Client has rental income on primary house and got 1098 from lender. I filled it out SCH E and 1098 as well although software shows allocated to personal use but did not allocate on SCH A for MORG INT AND PROP TAX. Do you have any insight? Need a help.

[TaxGuyBill]

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@HOPE2 wrote:

 rental income on primary house

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Can you clarify the situation?

1. Was it 100% their primary home, then converted to 100% rental?
2. Was it pretty much their primary home for the entire year, but they entire home was rented for a few days?  If so, how many days?
3. Or did they rent out a portion of their home, such as a room or two?
4. Something else?

[HOPE2]

84 DAYS RENTED THE ALL SPACE OF HER HOME AND THE REST OF THE YEAR has been AS PRIMARY HOUSE. I ENTERED PERCENTAGE OF OWNER-OCCUPIED RENTAL FOR 23% AND I SEE PROP TAX AND MORG INT SPLITTED OUT TO SCH E AND PERSONAL USE on  ALLOCATED PERSONAL USE column BUT WHATEVER I HAVE ON 1098 LENDER as PROP TAX AND MORT INT, flowed ON SCH A LINE 5 b.

[TaxGuyBill]

Owner-occupied generally means the owner is living there, and only rents out a portion of their home.  So I would not use that.

So just to confirm, it was their home, rented for less than one year, and then their home again?  It was not their home, then rented long term (and not their home again afterwards)?  It is a big difference in how to enter things.

What did you enter for the number of rental days and the number of personal days?

[HOPE2]

84 DAYS AND ZERO SINCE WHEN I ENTERED 281 DAYS number of personal days I HAD AN ERROR.

[TaxGuyBill]

You had an error because you ALSO entered it as owner occupied.  Get rid of the owner occupied and only enter the days.

However, as I asked before, was it only a temporary rental of a total of 84 days?  Or is it now permanently a rental (expected over one year) with no further personal use?  Again, it is a big difference for how you need to enter it.

[HOPE2]

HAS AN ANOTHER PROPERTY TO LIVE THERE BUT I WOULD LIKE TO KNOW ABOUT BIG DIFFERNCE IF SHE WANTS TO USE THIS RENTAL PROPERT FOR MORE THAN RENTAL DAYS IF RENTAL DAYS WOULD BE 84 DAYS. I REALLY APPRECIATE IT.

[TaxGuyBill]

Is the intent to rent it continuously for 1 year or more (no personal use during that year)?

You can't enter it until you know that.

[HOPE2]

Renting whole of the house for Airbnb ( not actively and substantially) and for the rest of the year back to home. While renting Airbnb client goes to the other home.

[TaxGuyBill]

If there is personal use in the 365 day period, then just enter the rental day and personal days, and it should prorate thing automatically.  Don't enter anything for the owner-occupied section.