100% rental expense for 50% owner

Forum|Forum|2 years ago
August 28, 2023
2 replies
12 views

Hi,

I have a client that owns 50% of a rental. I've always entered the 100% numbers and have it set as 50% owner.

In 2022, she had a legal expense regarding the property that only she paid for, not the other owner. How do I enter this expense so that she gets 100% of the deduction?

Thanks!

Lacerte Tax

This topic has been closed for replies.

PATAX

Level 12

Can you change the percentage from 50% to 100% just for that legal fee? If not, and it keeps defaulting to 50%, then just double the amount, and then the correct 100% will flow through. For example if she paid $500 in legal fees and she is entitled to $500 deduction, but 50% keeps showing up, then just enter $1,000 and 50% of that is $500 which is the correct amount. Make sure the state is okay too

abctax55

Level 15

I gross it up by the ownership percentage (ie, $ 100 up to 200 for the 50% haircut) & describe it as such.

HumanKind... Be Both

abctax55

Level 15

... my solution may not be 'pretty' but if you change the income & all the expenses to just her 50% so the presentation is 'pretty', don't forget the impact on depreciation.

This is my solution, too, when allocating some of my fee for the tax preparation.

HumanKind... Be Both

joshuabarksatlcs

Level 9

Be aware that the "pretty" solution may become "unpretty" IF 1099-Misc Rent for the property is reported under the SSN of the 50% client.

I stick with the unpretty solution and note it in my.

I come here for kudos and IRonMaN's jokes.

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