@Carl
I had asked a similar question on another thread:
https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/re-how-do-i-calculate...
However the responses I received there stated that the percentage of deductible mortgage interest varies year by year (and should be recalculated) as the total principal balance decreases over time. Can you point me to a specific section in Pub 936 where it is explicitly explained that the original percentages have to be carried through the life of the loan?
The explanation I've received is that as per Pub 535, which relates directly to the Business Expense, the total principal balance of the loan is repaid in the following order:
1. Personal use
2. Investments and passive activities (other than those included in 3)
3. Passive activities in connection with a rental real estate activity in which you actively participate
4. Former passive activities
5. Trade or business use and expenses for certain low-income housing projects
This is under Chapter 4 Interest -> Loan Repayment. If the percentage remains the same for the life of the loan, wouldn't they have specified that the loan is repaid at the same rate for the different allocations?
