If you use your dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. You will allocate your expenses based on the number of personal days as compared to the number of rental days. The personal portion of expenses, including qualified mortgage interest, property taxes, and qualified casualty loss (if any), will be reported as normally allowed on Schedule A (Form 1040) Itemized Deductions. The rental portion of the expenses will be reported on Schedule E (Form 1040) Supplemental Income and Loss. See IRS Publication 527 Residential Rental Property for more information.
To report your rental expenses in the TaxAct program, go to our Schedule E - Entering Rental Property in Program FAQ.
To report your personal expenses in the TaxAct program, go to one of the links below depending on the type of expense:
- Property taxes: Personal Property Taxes Paid
- Qualified casualty loss: Form 4684 - Casualty and Theft
- Mortgage interest: Form 1098 - Entering in Program
Additional Information
The allocation of expenses between rental and personal must always be done by hand and entered on the appropriate schedule (A or E).
If the rental property produces a loss, the Vacation Home Limitation Worksheet may limit the amount of rental expenses that were entered on Schedule E (not the personal portion which was entered on Schedule A). This calculation is reflected on Line 21 of Schedule E. If the mortgage interest or real estate taxes entered on Schedule E are limited by this worksheet, the amount not allowed to be deducted on Schedule E will transfer to Schedule A to be taken as an itemized deduction (along with the personal portion already entered on Schedule A).
If the rental property produces a gain, the full amount of rental expenses (not the personal portion which is entered on Schedule A) will be allowed to be deducted on Schedule E. The correct amounts will be reflected on the Schedule E. The Vacation Home Limitation Worksheet is not applicable in that situation, so no amounts should be transferred to Schedule A from Schedule E.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.
