Incorrect Net rental income in rental co ownership

[user17749089765]

Hi,

I seem to be getting a wrong amount in T776. We have a 50% co ownership in a rental property but the gross rental income is not being divided by 50% (expenses are divided properly). In result, what is being calculated as net rental income seems to be 100% of total income minus 50% of total expenses, instead of 50% of total income minus 50% of total expenses. I did mark my ownership % as 50.

[user17749089765]

There seems to be the same issue in Turbo Tax for 2024. Unless I am making a mistake by not marking some option somewhere in the program (not sure what else can be changed if the % of ownership is already specified), then it means I could have overpaid my taxes for 2024?

[TurboTax_Susan]

Please contact our phone support team as they will be able to assist you further.

[user17749089765]

I have contacted the support. It was determined that there is in fact an error in the 9369 box in the T776 form, which is wrongly applying 100% of gross rental income in order to calculate the personal Net rental income, even when the co ownership is marked as 50% only. The formula should be: 50% of gross rental income minus 50% of total expenses, while it seems to be 100% of gross rental minus 50% of expenses, producing much higher amount which is transferred into T1 form and results in higher total general income amount.

I am using Turbo Tax for years at this point, and just accidentally spotted this error.  It is deeply disappointing that the program cannot really be trusted to properly calculate your taxes. The whole idea of using this automated tool it is to be sure you're not making a mistake! I am going to look into the same form in 2024 version to confirm whether the same problem occurs there as well.

[user17749089765]

The formula for box 9369 is incorrect in 2024 as well. The same thing happens when I try to use the forms instead of Easy Step, which I was using before. I will need to file an adjustment for 2024, as the Total Income, and in result, Taxable Income were incorrectly increased due to this error. The amount of tax owed would have been much lower.