I purchased a co-op unit that I rent out. Is the portion of the co-op monthly maintenance charge that goes to mortgage principal considered an expense for Schedule E?

[April151]

Thank you in advance for your consideration. A few details to add and to emphasize: This is a rental property that I have, not where I live. This is a question about mortgage principal, not interest (I know interest is an expense). I am not in the real estate business. This is for the mortgage the co-op holds as opposed to a personal mortgage that I have directly with bank. Monthly "maintenance" payments are made to co-op. On the statement for the monthly payments, it does not break down what the payment goes to, but I receive a yearly letter from the co-op CPA that explains relative to my shares, how much went to real estate tax, mortgage interest, and mortgage principal. I have no problem calculating those amounts and so they are known based on the letter. My only question is, considering that this a property that I rent out, if the portion of my co-op maintenance charges that goes to paying down the mortgage principal (for the loan the co-op as a whole has) is considered an expense for Schedule E. Thank you again!

[PatriciaV]

Only the portion of the coop payments for mortgage interest and property taxes are deductible for the rental property. Mortgage principal is not deductible.