I bought rental properties B and C using the proceeds from a mortgage on rental property A. The tracing rules state that I need to report the interest on Schedule E based on how the proceeds of the mortgage were used (so I would report the interest as being used for properties B and C since that was how the funds were used). What is the best way to do this? Would I report the interest on the 1098 for property A as 2 1098s for properties B and C (or would I state that the interest I'm claiming on Properties B and C did not appear on a 1098)? Thank you in advance for your response.
You'll need to sign in or create an account to connect with an expert.
Do NOT enter the 1098, only enter the portion of interest for each as an expenses.
Since the loan is not secured by either rental, and was not used for your main home, the interest is only a rental expense and not Home Mortgage Interest.
A 1098 is only required to claim Home Mortgage Interest.
In your situation, entering the 1098 could cause confusing for the program.
Allocate the interest proportionately to the rentals.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
janetcbryant
New Member
noodles8843
New Member
abarmot
Level 1
IslandMan1
New Member
Micky2025
Returning Member