Anita01
New Member

Investors & landlords

You can enter the mortgage portion on the Schedule E as though you received a separate 1098 for just that portion, then be sure to reduce the personal interest amount on your Schedule A entry under Deductions and Credits.  You would have to do some arithmetic to figure out what portion of the interest was paid on the mortgage for the money invested in the rental.  For example, if the total was $250,000 and $50,000 was invested in the rental, divide $50,000 by $250,000 and multiply that percentage times the interest.  Since you refinanced in early 2017, hopefully all the interest you paid in 2017 was for the refinanced total.  You could use the same percentage to apply to closing costs to allocate a portion to the rental.

You'll be asked during the rental interview if you have any mortgage information to enter.  Just go through that section and answer the questions.  In that interview , you can also separate out points paid and enter the portion related to the rental property, again using the same ratio you already calculated.  The balance of closing cots can be added to the cost basis of your rental.

Take your time to read the  questions  and make correct entries and you will find all this easier than you think.