Tax situation with long term and short term rental.

[Joval Mathai]

I’m a first time home-buyer. I bought a multi-family in NJ in May 2023. 

We live in Unit 1 and Unit 2 is rented out. Unit 1 where we live has a basement that’s rented out on Short-term rental/Airbnb (with average stay per person < 7days).

I attempted to do taxes (married, filing jointly with my spouse) on turbo-tax. When adding the rental income for Unit 2, it asked for % sq.ft. rented out. Any deductions (including mortgage tax, insurance etc.) added there was split accordingly and corresponding amount was shown under rental deductibles. We did the same for short-term rental/Airbnb.

It asked not to separately add mortgage interest/insurance paid for the unit where we live in- but we don’t see it deducted anywhere else apart from the rental+Airbnb.

Any suggestions on how to deal this situation with using the same property as primary residence + rental + short term rental ?

Thank you in advance.