rental expenses divided between rental and personal use?

[Heather Kavarana]

First the details. We went under contract on our new house end of January2012. Early February we started telling everyone we know that we were moving but keeping our old house to rent and that it would be available to rent as soon as we moved if they knew of anyone interested. We moved March 1 and had the place ready to be rented March 4. It ended up being vacant (but ready to rent) for 103 days, we were occupying it 63 days and it was rented 200 days. Since it was vacant we decided to get some repairs out of the way mostly starting in April (wall dents, painted a few rooms, replaced a leaking shower head, and painted the cabinets). We also paid someone to mow the lawn while it was vacant and to clean the house before the renters moved in. We of course also paid for utilities while it was vacant. Our tenants pay us rent and also are responsible for house and yard maintenance and utilities. So my problem is that the H&R software keeps decreasing almost all of our expenses by about 20% even though they are clearly rental expenses, not expenses while we were living there. In IRS p527 Chapter 4, “Property Changed to Rental Use” it says that yearly expenses “such as taxes and insurance” must be divided between rental and personal use. Why are my rental expenses also being divided?