Hal_Al
Level 15

Investors & landlords

You may have  initially purchased it as an investment property.  But since it was being used by family, for tax purposes, it was a 2nd home.  You had "personal use". 

 

Real estate taxes are deductible on all property. Mortgage interest is deducting on two homes.

 

If it really was investment property, you would have been allowed to "capitalize carrying costs" (like insurance and HOA fees, maintenance) and add them to your cost basis.  But to do so, you had to file that election with your tax return each year. The election is made with the tax return by its due date, by attaching a statement. You cannot wait until you sell the property, but must make that election each year.