Do I only enter 54% of the number shown on my 1098?
Yes, exactly. Note that with business property (which is what rental property is) the only number you will enter in the SCH E section is 54% of the amount shown in box 1 of that 1098. If any of the remaining 46% of interest doesn't qualify as a SCH A itemized deduction, then none of the other boxes on that particular 1098 will be entered anywhere in the program.
Now if you used any part of that remaining 46% of the money (your cash out amount) for something directly related to the rental or other business property you own, let me know what you used it for and we'll see if we can increase that 54% you can claim on SCH E, legally.
If you used any portion of the 46% cashed out for something on your primary residence or other "personal use" real estate that you own, let me know what it was, and we'll see if any of that 46% can be claimed as a SCH A itemized deduction.
