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nixzaliz16
New Member

Do I qualify for mortgage deduction credit if my home is a duplex and I rent the bottom portion?

 
1 Best answer

Accepted Solutions
AndreaG
New Member

Do I qualify for mortgage deduction credit if my home is a duplex and I rent the bottom portion?

Yes. The deductions will have to be allocated between the portion of the home that is rented out and the portion that you live in. Additionally, to take a deduction for the expenses for the part of the home that you live in, you would have to qualify to itemize your deductions. 

To itemize your deductions, you would have to have personal expenses such as medical and dental expenses, mortgage interest, real estate taxes, unreimbursed job expenses and certain miscellaneous expenses, and charitable contributions that when combined together, total more than your standard deduction. For example if you file single, your standard deduction is $6300 so you would have to have personal expenses that total more than $6300.

In the rental property section, Turbo Tax asks you questions about your property. Since you are renting out a portion of your house, you have the option of entering all of the expenses such as mortgage interest and property taxes in the rental section and then Turbo Tax will allocate the appropriate amount of each expense as an itemized deduction.

The other option is that you can enter just the portion of each expense that should be allocated to rental property and then manually enter the remaining amount in the itemized deductions section. 

To make entries in the rental property section of Turbo Tax, you will need to use the Premier edition:

  • log in to your Turbo Tax account
  • click on "take me to my return"
  • click on the "federal taxes" tab
  • click on "wages and income"
  • scroll down to "rental properties and royalties" and click on "start"
  • Turbo Tax will start by asking you questions about your rental property
  • when you reach the screen that says, "do any of these situations apply to you?"
  • there is a selection that says, "I rent out a unit in a multi unit property". This should be check marked 
  • continue navigating through the screens, until you get to the screen that says, "let us calculate your expense deductions for you". There are two options on this screen. 
    • answer yes if you want to enter your total expenses and then Turbo Tax will allocate the expenses between rental expenses and itemized deductions.
    • answer no if you want to enter only the amount of the expense that is rent related. You will then need to enter the remaining amount of expenses that qualify to be itemized, in the itemized deductions section of Turbo Tax.

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3 Replies
AndreaG
New Member

Do I qualify for mortgage deduction credit if my home is a duplex and I rent the bottom portion?

Are you talking about claiming the mortgage interest credit on Form 8396   <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f8396.pdf">https://www.irs.gov/pub/irs-pdf/f8396.pdf</a> OR are you talking about taking an itemized deduction and also an expense to offset the rental income?
nixzaliz16
New Member

Do I qualify for mortgage deduction credit if my home is a duplex and I rent the bottom portion?

I'm talking about the itemized deduction and also an expense to offset the rental income
AndreaG
New Member

Do I qualify for mortgage deduction credit if my home is a duplex and I rent the bottom portion?

Yes. The deductions will have to be allocated between the portion of the home that is rented out and the portion that you live in. Additionally, to take a deduction for the expenses for the part of the home that you live in, you would have to qualify to itemize your deductions. 

To itemize your deductions, you would have to have personal expenses such as medical and dental expenses, mortgage interest, real estate taxes, unreimbursed job expenses and certain miscellaneous expenses, and charitable contributions that when combined together, total more than your standard deduction. For example if you file single, your standard deduction is $6300 so you would have to have personal expenses that total more than $6300.

In the rental property section, Turbo Tax asks you questions about your property. Since you are renting out a portion of your house, you have the option of entering all of the expenses such as mortgage interest and property taxes in the rental section and then Turbo Tax will allocate the appropriate amount of each expense as an itemized deduction.

The other option is that you can enter just the portion of each expense that should be allocated to rental property and then manually enter the remaining amount in the itemized deductions section. 

To make entries in the rental property section of Turbo Tax, you will need to use the Premier edition:

  • log in to your Turbo Tax account
  • click on "take me to my return"
  • click on the "federal taxes" tab
  • click on "wages and income"
  • scroll down to "rental properties and royalties" and click on "start"
  • Turbo Tax will start by asking you questions about your rental property
  • when you reach the screen that says, "do any of these situations apply to you?"
  • there is a selection that says, "I rent out a unit in a multi unit property". This should be check marked 
  • continue navigating through the screens, until you get to the screen that says, "let us calculate your expense deductions for you". There are two options on this screen. 
    • answer yes if you want to enter your total expenses and then Turbo Tax will allocate the expenses between rental expenses and itemized deductions.
    • answer no if you want to enter only the amount of the expense that is rent related. You will then need to enter the remaining amount of expenses that qualify to be itemized, in the itemized deductions section of Turbo Tax.

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