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supiville
New Member

Rented out primary residence w/loan amt > $1M for part of the year. How do I acct for diff qualified loan limit for personal use portion and rental portion?

I rented out my primary residence for part of the year.  The loan amount is over the qualified limit that applies to the property ($1 million).  

The Schedule E interview questions ask for total mortgage interest paid (from Form 1098), and splits the amount based on the proportion of time my property is a rental property.  The portion attributable to the rental property is not subject to the $1 million qualified loan limit.  TT then calculates the difference between the total mortgage interest and that attributed to the rental property as the amount allocated to personal use.  This amount directly flows into Schedule A, line 8a.  However, the amount for Schedule A, line 8a needs to be adjusted because the loan amount is above the qualified loan limit (based on calculations per Publication 936).  

How can I reduce the amount of interest claimed on Schedule A, line 8a to adjust for the loan amount being above the qualified loan limit without adjusting the amount of interest claimed on Schedule E?
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2 Replies
MaryK4
Expert Alumni

Rented out primary residence w/loan amt > $1M for part of the year. How do I acct for diff qualified loan limit for personal use portion and rental portion?

You will have to do the math based on proportions.  First determine the time for personal use versus rental.  Then IF $1m apply the limitation to get percentage and apply that to your personal deduction.  (75%)

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supiville
New Member

Rented out primary residence w/loan amt > $1M for part of the year. How do I acct for diff qualified loan limit for personal use portion and rental portion?

Thank you!  I can determine the amount; the issue is that I don't know how to manually adjust the number in TT Online, Schedule A, line 8a (it flows through automatically from Schedule E).  

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