Mortgage interest as well as the property taxes are deductible. Period. Where you deduct it on the tax return depends. For the period of time it was your primary residence or 2nd home, interest and taxes are claimed on SCH A. For the period of time it was a rental, those are deducted on SCH E.
It's important to work through the program the way it's designed and intended to be used also. That way, the program will do all the pro-rating and splitting between the SCH E and A for you, on "just about" everything. In particular, the mortgage interest and property taxes.
After dealing with the rental section and moving on, when you get to the "your home" section I just can't stress how important it is to pay attention to detail on that screen. If you don't, then I can practically guarantee that you will unwittingly "double dip" on the mortgage interest by claiming it twice. So be careful and ask questions if you're not sure.
It's apparent (to me anyway) that this is your first time dealing with rental property. In the answer box below is important information you will find useful and helpful, which will mainly help you avoid making mistakes in the program that will confuse you and make your tax return wrong.
