I own a duplex with another individual. That individual lives in one half, and the other side is rented out. When it comes to Schedule E, I know I take half of the rented sides depreciation and also include half of the income, but do I get to take half of the property tax, mortgage interest, and insurance as deductions on Schedule E, for the other person would take half since they live there on their 1040.
Items such as property tax, mortgage interest, and insurance would be divided in half. Half of each would apply to each unit.
Therefore, when determining what amount you would claim on your Schedule E, you would take half of the half allocated to the unit that is being rented, or one quarter of each of these items.
[edited 2/7/2024 | 5:12 am PST]
To clarify,
do you both share ownership of only one side or the entire building?
We are both 50% ownership of the entire property. This person just happens to live in one half of the duplex.
Items such as property tax, mortgage interest, and insurance would be divided in half. Half of each would apply to each unit.
Therefore, when determining what amount you would claim on your Schedule E, you would take half of the half allocated to the unit that is being rented, or one quarter of each of these items.
[edited 2/7/2024 | 5:12 am PST]
Thanks AnnetteB6. I get the rental side of things, but as for the second home, the deal with my partner that is living in one side of the duplex is, for example, if the mortgage, property tax, and insurance is a total of $2000, for example, they are responsible to pay $1000, or half while they live there. The rental side would pay the other half and what is left over is for expenses. In this case, would they not get half of the mortgage interest, property taxes, and insurance, plus the 25% from the rental side? I would just be left with the 25%. Or am I not seeing this correctly. Thank you!
You are correct. I was trying to divide it into too many pieces! I will edit my previous answer to remove the confusion.
For the rental property side, you and your partner would each claim one quarter of the mortgage interest, property tax, and insurance (if the insurance covers both units).