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New Member
posted Jun 4, 2019 11:35:03 PM

Can I deduct principal payments on my rental property

I am listing expenses for my rental property. Is my total mortgage payment including principal a deduction, or only interest and taxes?

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1 Best answer
Level 15
Jun 4, 2019 11:35:04 PM

Only the mortgage interest can be entered as an expenses for the rental property, not the principal.  You should have entered the property as an Asset to be depreciated which would then cover your principal payments.

10 Replies
Level 15
Jun 4, 2019 11:35:04 PM

Only the mortgage interest can be entered as an expenses for the rental property, not the principal.  You should have entered the property as an Asset to be depreciated which would then cover your principal payments.

New Member
Jun 4, 2019 11:35:06 PM

Thank you!

New Member
Jun 4, 2019 11:35:07 PM

So how to enter as an asset and then if the property is reconverted to personal property or sold - then the depreciated amounts much be recovered ? Also how long to depreciate the asset ?

Alumni
Jun 4, 2019 11:35:10 PM

Mortgage Principal is never deductible. Only mortgage interest and taxes.

New Member
Jun 4, 2019 11:35:12 PM

Thank you!

New Member
Sep 6, 2019 4:53:00 AM

"entered the property as an Asset to be depreciated which would then cover your principal payments"

How exactly do I enter the principal payments in assets to be depreciated?  Thanks.

Level 15
Sep 6, 2019 11:14:21 AM

Again the principle payments are NOT entered anywhere in the program ... you enter the cost basis of the property in the asset entry section and choose the proper category like residential rental and the program will compute the depreciation automatically based on the IRS rules.  

New Member
Sep 6, 2019 1:01:02 PM

Thank you.

New Member
Apr 9, 2023 5:35:29 PM

Am i able to deduct or depreciate my asset if I have a not-for-profit rental?

Expert Alumni
Apr 10, 2023 6:03:07 AM

Unfortunately, when you rent below fair market price (ie: not-for-profit), the property is considered a "second home" and few expenses are deductible.

 

The rental income from this property is reported as Miscellaneous Income in the Less Common Income section at the bottom of Wages & Income


As your "second home", property taxes and mortgage interest may be included as Itemized Deductions (Your Home under Deductions & Credits). Depreciation is not available for a second home.

 

@BekaD3