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Schedule E vacation rental

Forum|Forum|3 months ago
March 26, 2026
2 replies
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I have a client with a vacation condo. Rental 89 days personal use 40. When I enter all expenses on E worksheet (insurance , supplies taxes and depreciation) it uses 69% and adjusts all figures to get to zero , which is correct as personal use exceeds the 14 days and 10% of rental days. However when I add in condo fees program takes 69% of that figure and creates a loss which I don't think it should. What am I doing wrong ? Thanks!

ProSeries Professional

Best answer by TaxGuyBill

Thank you for the reply. I neglected to tell you that total condo fees were $9480. If I put it on Line 11 program deducts $3220 in r e taxes and $6541 of condo fee (69% -rental portion 89/129, showing $2886 loss. All other lines (supples, repairs ins. utilities and depreciation ) are zeroed out

As you stated the only way to make it work is to put it on Line 10 legal and professional fees. It then seems to calculate all the other expenses in proportion and shows zero loss, with a percentage deducted of all other expenses mentioned above (except depreciation). Calculates $2782 of the condo fee I guess the grey box you mentioned is the problem. Did you say Pro Series knows this is an issue? Just curious. Thanks again!

@billr617 wrote:

As you stated the only way to make it work is to put it on Line 10 legal and professional fees. It then seems to calculate all the other expenses in proportion and shows zero loss,

Did you say Pro Series knows this is an issue?

I'm glad you are able to get it to work.

I don't know if the developers know about the error or not, but even if they knew of the problem, most likely they would not care.

sjrcpa

Level 15

Is the loss equal to the amount of mortgage interest and taxes that would otherwise be deductible on Schedule A (69% or 89/365)?

The more I know the more I don’t know.

B

billr617Author

Level 4

Thank you - No Taxes are 4667 , 3220 taken on E and 1447 to A. Loss of (2876) on E if I use 69% of condo fee.

B

billr617Author

Level 4

no mortgage

T

TaxGuyBill

Level 15

Which line are you entering the condo fees?

Are they itemizing their personal deductions on Schedule A?

Is there any gross rental income? If so, how much?

B

billr617Author

Level 4

Fees on Lin 11- Gross rent 6885 - standard deduction

T

TaxGuyBill

Level 15

Just confirming: Line 22 of Schedule E Worksheet shows a loss?

While ProSeries does have a significant error in that regard, I'm not quite seeing why it is being applied to your situation (and I can't recreate it, unless you entered the insurance and supplies on weird lines).

'Pure' rental expenses (that have no personal use) and mortgage interest and real estate taxes CAN potentially create a loss. However, ProSeries' error that they have ignored since 2018 is that mortgage interest and real estate tax can only create a loss if otherwise allowable - in other words, if you Itemize on Schedule A (for the most part). That is what the IRS and Tax Court changed/clarified, and what Intuit has ignored since 2018.

Entering on line 11 (management fees) - that is treated as pure rental expense. If it is partially applicable to personal use, enter it on a different line. Look at column (d) of the Schedule E Worksheet. If it is a "gray" box, that is an expense that ProSeries will potentially allow a loss, such as advertising, commissions, management fees, and other expenses.

Except for mortgage interest and real estate tax, don't enter a 'shared' rental expense (that could have some personal element) on any of those lines that have a gray box in column (d).

Getting back to your problem, even IF you were Itemizing, I'm not seeing how those amounts on the gray-box lines are adding up to an amount larger than the $6885 of gross rent. In other words, unfortunately, I'm unsure why it is doing that.

Maybe post some screenshots of the entire Schedule E Worksheet?

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