Level 6

Deductions & credits

You are correct to allocate the mortgage interest percentage between your personal property and your rental property.  

Enter $3,750 for your Mortgage Interest Deduction for Schedule A.  Enter $1,250 for the Mortgage Interest Paid on your rental property for Schedule E.  The IRS will match your combined amounts reported by you with the Form 1098, Mortgage Interest Statement received from your lender.

See this TurboTax article Deducting Mortgage Interest FAQs for additional information.