Mortgage
interest, property taxes, and mortgage insurance are divided between personal
(Schedule A, itemized deductions) and rental use (Schedule E) proportional to the number of days used for
each and square footage rented
For instance, if you rent
out 50% of your floor space, deduct 50% of your property tax and mortgage
interest (and mortgage insurance) times (days rented /365 ) as a rental expense, and the balance as
a Schedule A, itemized deduction.
If you rent 50% of your
floor space all year, divide the expenses 50-50 between itemized and rental
expenses.
So, you
will enter a portion of mortgage interest and property taxes in both areas
Schedule A, itemized deductions, and Schedule E, rental income and expenses
