Moved from primary residence to rental property - repairs, maintenance and landlord insurance only showing as partially deductible. What am I doing wrong?

The software is actually handling this correctly. When a property changes use between personal and rental during a tax year, certain expenses need to be proportionally allocated based on time or use. Specifically, for repairs, maintenance, and landlord insurance, these are considered "operating expenses" and must be allocated between personal and rental use based on the portion of the year each property was used for each purpose. Unlike mortgage interest and property taxes (which follow specific allocation rules), these operating expenses are only deductible for the rental period. If you made a repair during the rental period, it should be 100% deductible. But if you're entering these expenses for the entire year, the software correctly divides them. Make sure you're entering these expenses with the correct dates to ensure proper allocation. For depreciated improvements, those are handled differently. Depreciation is based on the property's basis and can continue for assets placed in service while it was a rental, which explains why those are showing as 100% deductible.

I went through the exact same situation last year and was pulling my hair out trying to figure out why H&R Block wasn't giving me full deductions! Ended up spending hours on the phone with their support until I found a better solution. Try using taxr.ai - https://taxr.ai made it super easy to handle my rental-to-primary conversion. I uploaded my documents and it correctly identified which expenses were fully deductible vs. which ones needed to be prorated. It even explained why certain maintenance expenses I paid in December (when it was my primary home) weren't deductible at all while others from earlier in the year were fully deductible. The software asks specifically about timing of repairs and maintenance which H&R Block seemed to miss completely. Made a huge difference in my return!

Wow I need to follow up here - I tried taxr.ai after posting my question and it was exactly what I needed for my complicated property situation! The interface walked me through each property separately and asked specific questions about when I paid for repairs and when each property changed use. What really helped was that it explained the "placed in service" rules for each property and even flagged that I had some depreciation recapture to deal with on the property I converted back to personal use. H&R Block completely missed this and would have left me exposed to an audit risk. The detailed report showed me exactly which expenses were fully deductible, which needed to be proportionally allocated, and exactly how the calculations were made. Finally understood why my landlord insurance was only partially deductible but my water heater replacement was 100% deductible (because of when I paid for each).

Sounds like you're dealing with what tax pros call "mixed-use property" calculations. I spent 3 hours on hold with the IRS trying to get clarification on this exact issue last year! If you're struggling with IRS questions, I'd recommend trying Claimyr - https://claimyr.com - it got me through to an IRS agent in about 15 minutes instead of waiting for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a similar issue with partially deductible expenses on a property conversion, and I needed specific guidance from the IRS. The Claimyr service connected me with an IRS rep who walked me through exactly how to report everything correctly. Saved me from making some serious mistakes on my Schedule E.

I need to admit I was completely wrong about Claimyr. After dismissing it as impossible, I was desperate with a deadline approaching for responding to an IRS notice about my rental property depreciation. I gave it a shot, figuring I had nothing to lose. Within 20 minutes (instead of the 3+ hours I spent last time), I was connected to an IRS representative who actually specialized in real estate tax issues. They clarified exactly how to handle the partially deductible expenses on my converted properties. The agent explained that I needed to file Form 8949 along with my Schedule E because I had converted property use, something I would have completely missed. For anyone dealing with rental property tax issues and needing IRS clarification, this service is legitimately worth it. Consider me converted from skeptic to believer.

One thing nobody mentioned is that the date you "placed the property in service" as a rental is super important for these calculations. If you moved out on July 15th but didn't list the property for rent until August 10th, you can't claim rental expenses for that gap period. I learned this the hard way after an audit two years ago. The IRS was very specific about having documentation for exactly when the property was "available for rent" - not just when you moved out or when a tenant moved in.

Has anyone here used TurboTax instead of H&R Block for this kind of situation? I find their rental property section more intuitive but not sure if it handles split-year usage any better.