I have an attached accessory dwelling unit (upper floor) of my primary, single-family home residence which we fully rent out all year. Historically I have applied a portion of my mortgage interest deduction (38% based on square footage of rental as portion of total square footage) Schedule E deductions for the rental and the rest to my personal itemized deduction. Recently I'm finding it would actually be more advantageous (maximize my return) to apply all of the mortgage interest under my personal itemized deductions. Am I required to split it out between the rental portion and part of the home I live in or can I opt to apply it to my personal itemized deduction entirely? Thank you!
