Did you live in a house part of the year, and then rent it out for part of the year in 2006? If not, you can just ignore this post. But if you did, and are using Turbo Tax to do your taxes this year, you might want to keep reading.
Okay, okay…I keep thinking maybe I shouldn’t be writing this post. It could come across spiteful or sound like I’m just complaining. That’s really not what I’m trying to do. All of that aside, if you fit the description above, Turbo Tax will not properly calculate your taxes this year. As part of my detailed (meticulous) engineer training, I went back to doublecheck the math after inputing my info in TT because I wanted to make sure that the program works properly. Turns out, there is a bug on Schedule E that does not properly account for losses and expenses when you live in a house and then rent it for part of the year. Under this circumstance, you are not allowed to have a loss, and must carry over depreciation and some expenses to following years. Publication 527 details these requirements and a worksheet can be found on page 7 to help figure it out.
I’ve called tech support repeatedly about this issue to see if it ever got fixed, and it didn’t. The good news is you can get a refund. The bad news is that they will make you pay shipping.
I hope this info saves someone from getting audited and corrected. My main concern is getting this information out to the people in my situation who didn’t take the time to check TT carefully.
