Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
eagish
New Member

I rented my condo for part of the year - but entered all of my mortgage interest and tax expense under the rental income section - should I be pro-rating it?

should I be putting part of the interest/ taxes paid (1/6) under rental expenses and the rest under deductions and credits?
1 Reply
HelenaC
New Member

I rented my condo for part of the year - but entered all of my mortgage interest and tax expense under the rental income section - should I be pro-rating it?

Yes. Per Publication 527 - IRS.gov Residential Rental Property (Including Rental of Vacation Homes), page 16: 

  • If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. 
  • You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). 
  • You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity or painting the outside of the house.

How to divide expenses

  • If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. 
  • You can use any reasonable method for dividing the expense. It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. 
  • The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home
Dynamic AdsDynamic Ads
Privacy Settings
v