Can I deduct principal payments on my rental property

[Sue246]

I am listing expenses for my rental property. Is my total mortgage payment including principal a deduction, or only interest and taxes?

[DoninGA · Accepted solution]

Only the mortgage interest can be entered as an expenses for the rental property, not the principal.  You should have entered the property as an Asset to be depreciated which would then cover your principal payments.

[Sue246]

Thank you!

[Stixoffire]

So how to enter as an asset and then if the property is reconverted to personal property or sold - then the depreciated amounts much be recovered ? Also how long to depreciate the asset ?

[jerry2000]

Mortgage Principal is never deductible. Only mortgage interest and taxes.

[Sue246]

Thank you!

[ywng]

"entered the property as an Asset to be depreciated which would then cover your principal payments"

How exactly do I enter the principal payments in assets to be depreciated?  Thanks.

[Critter]

Again the principle payments are NOT entered anywhere in the program ... you enter the cost basis of the property in the asset entry section and choose the proper category like residential rental and the program will compute the depreciation automatically based on the IRS rules.  

[ywng]

Thank you.

[BekaD3]

Am i able to deduct or depreciate my asset if I have a not-for-profit rental?

[PatriciaV]

Unfortunately, when you rent below fair market price (ie: not-for-profit), the property is considered a "second home" and few expenses are deductible.

The rental income from this property is reported as Miscellaneous Income in the Less Common Income section at the bottom of Wages & Income. 

As your "second home", property taxes and mortgage interest may be included as Itemized Deductions (Your Home under Deductions & Credits). Depreciation is not available for a second home.

@BekaD3