There is NOTHING in FAR 61.1(b)(4) that states you should subtract 0.2. I would agree that you should subtract a "portion" of the total flight time when putting it in the "instrument" column as there is a portion of the actual take off and landing that is NOT by sole reference to instruments. However the total time SHOULD be logged in the "PIC" or "total time" column as appropriate.
My guess is that the school where you trained are confused about definitions. There was a trend a few years back where schools were "adding" 0.2 to the time you were charged---this should have been stopped by this legal interpretation.
Here is your cite:
“U.S. Department of Transportation
Federal Aviation Administration
APR 27 2007
(address omitted)
Dear Mr. (omitted),
This responds to your letter dated December 13, 2006, in which you ask three questions concerning the logging of flight time in a helicopter. The answers all flow from the definition of "flight time" found in section 1.1 of Title l4 Code of Federal Regulations.
Your three questions are:
1. May a pilot log as "flight time" to qualify for a certificate or rating under 14 CFR Part 61, or for purposes of qualifying under 14 CFR 135.243(b)(2), that time accrued in a helicopter when the aircraft is sitting on the ground with the engine running and rotor blades turning, but the aircraft has not moved from its parking place and flight has not yet commenced?
2. May a pilot log as "flight time" to qualify for a certificate or rating under 14 CFR Part 61, or for purposes of qualifying under 14 CFR 135.243(b)(2), that time accrued in a helicopter after the end of a flight prior to shut down when the helicopter has set down and come to a rest at its parking place, flight has ceased, but the engine is still running and rotor blades are still turning?
3. If a helicopter is equipped with a "time in service" meter that is actuated only by the collective pitch control, may a pilot add a couple of tenths of an hour of "flight time" to their log book in excess of the aircraft "time in service" meter reading, to account for the time that the aircraft is starting and running up at the beginning of the training period prior to lift off, and that time the engine is idling and cooling down after the last landing, prior to the engine being shut off?
The regulations in pertinent part define "flight time" as "pilot time that commences when an aircraft moves under its own power for the purpose of flight and ends when the aircraft comes to rest after landing." 14 C.F.R. § 1.1. As with fixed-wing aircraft, flight time in a helicopter commences the moment that it moves under its own power away from its parking place for the purpose of flight- whether departure is commenced by lifting off or taxiing. (Helicopters can be equipped with different types of landing gear; and those equipped with wheels or pontoons have the option of a vertical lift-off or taxiing before lift-off.) Flight time ends for any helicopter operation when the helicopter comes to rest after landing.
It follows from the plain words of the regulation that the circumstances you described could not be logged as flight time. The answer to all three questions is that flight time may not be logged.
This response was prepared by Viola Pando, Attorney in the Regulations Division of the Chief Counsel and has been coordinated with General Aviation Division of Flight Standards Service. If you have additional questions regarding this matter, please contact us at your convenience at (202) 267-3073.
Sincerely,
Rebecca MacPherson
Assistant Chief Counsel Regulations Division”