We rented a house in the 1st half last year followed by remodel in the 2nd half. For the remodel time, can we deduct property tax/interest as rental loss or second home?

 
AnnetteB6
Employee Tax Expert

Investors & landlords

As long as the rental property was still advertised and available to rent during the time it was being remodeled, then it was still considered a rental property and you can deduct the property tax and mortgage interest as a rental expense. 

 

Otherwise, the rental property could be considered to be converted to personal use during the second half of the year and then you can deduct the property tax and mortgage interest as part of Schedule A itemized deductions as long as the property can be considered your second home.

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