Rental Property Expenses for S-Corporations & Partnerships Do Not Exclude Personal Use Time
Updated: 1/21/2013
Article ID: SLN65438
When a Rental property is used for ‘Personal Use’ during the year, some expenses may need to be reduced based on the number of days the property was used for ‘Personal Use.’
TurboTax Business will not reduce any expense for the percentage of time the rental was used for ‘Personal Use.'
Only the 'Business Use' percentage should be entered in the program.
Who Does This Affect?
If your 1120S or 1041 include both of the following you may be impacted by this issue.
Rental Income and Expenses (Form 8825)
And
The Rental Property included 'Personal Use' days during 2012
Workaround:
Steps to determine 'Business Use' percent
Add the total of the days rented at 'fair rental' with the days used for 'personal' use.
- Days rented at Fair rental - 300
- Days used for personal use - 65
- Total days rented at fair rental value or used for personal use = 365
Then divide the days rented at Fair Rental Value by the Total calculated above to determine you business use percent.
(Eg). 300 / 365 = 82.19%
Then multiply your business use percent by the rental expense to determine the business expense to enter in program.
