How to separate rental property mortgage interest from a combined loan including my primary residence?
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You need to manually calculate the amounts.
For example, lets say the total loan is for $500,000, and $200,000 was use for "acquisition debt" (purchase price and improvements) to your main home. Let's also say that $250,000 was used for rental purposes and $50,000 was used for other things.
That means that 40% ($200,000 divided by $500,000) of your interest is allocated for your personal mortgage interest, 50% ($250,000 divided by $500,000) of the mortgage interest is allocated to rental expenses, and 10% ($50,000 divided by $500,0000) is allocated for 'other' interest.
So for 2017, you can enter 50% for rental interest and 50% for personal mortgage interest (assuming the 'other' loan amount is less than $100,000).
For 2018, you can enter 50% for the rental interest and 40% for personal mortgage interest (the 'other' interest is no longer deductible starting in 2018).
You need to manually calculate the amounts.
For example, lets say the total loan is for $500,000, and $200,000 was use for "acquisition debt" (purchase price and improvements) to your main home. Let's also say that $250,000 was used for rental purposes and $50,000 was used for other things.
That means that 40% ($200,000 divided by $500,000) of your interest is allocated for your personal mortgage interest, 50% ($250,000 divided by $500,000) of the mortgage interest is allocated to rental expenses, and 10% ($50,000 divided by $500,0000) is allocated for 'other' interest.
So for 2017, you can enter 50% for rental interest and 50% for personal mortgage interest (assuming the 'other' loan amount is less than $100,000).
For 2018, you can enter 50% for the rental interest and 40% for personal mortgage interest (the 'other' interest is no longer deductible starting in 2018).
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