1098 for mortgage in personal name while investment property title is held under LLC

[vmarwah]

I was hoping someone can shed some light on this or point me in the right direction as I am a new landlord.

My LLC holds the title for the investment property. I am going to file a partnership return for the investment property with all the income, expenses, depreciation, etc. My mortgage is in my personal name and I received 1098 from my lender in my personal name. How do I deduct this mortgage interest on my partnership return for the investment property?

Thank you in advance for any help

[AliciaP1 · Accepted solution]

Since you are operating your investment property under a state law entity (LLC) there is no provision to allow the interest reported in your personal name to be deducted by the LLC.

You also stated you will be filing a partnership return so I am assuming your LLC is actually a multi-member LLC. Even as a husband/wife partnership LLC (if that is the case) it is disallowed because of the LLC. 

There are ways you can switch the mortgage over to the LLC and you may want to investigate any options in that direction.

You point out that this is an investment property, but you may still be able to deduct the interest on your personal return if you itemize deductions and meet other conditions including if you “utilized the property yourself for 14 days or 10% of the number of days you rented it out, whichever is greater”.

You might want to consider contacting a tax professional in your area who can help you with the details.

Can I deduct my mortgage?