Since your rental is part personal and part rental, enter the mortgage interest first in the rental section and then second review the personal mortgage interest section for the itemized deductions.
For the rental, you'll need to add your property, tell the software you converted from personal use to a rental in 2016 and then enter all income and deductions 'within.' For a part personal/part rental like yours, the software will recommend allowing it to allocate expenses like this. Agree to this option and enter your mortgage interest with the rental.
- Click Take me to my return
- Select the Federal Taxes tab and then click the Wages & Income tab below it
- Scroll down to the Rental Properties and Royalties section and click the blue hyperlink Show more
- Click Start/Revisit next to Rental Properties and Royalties (Sch E)
- Next you'll be asked about your real estate involvement and then be able to to add your rental property. If you leave and come back to this section, after you've setup the property, you'll be at a summary screen listing your property(ies) and you'll click Edit to add information or make changes
- Be certain you check the box for I converted this property from personal use to a rental in 2016. on the screen titled Do Any of These Situations Apply to This Property? when setting up your property.
If you entered it under the personal itemized deductions section first, you can go in and delete it. This is found under: Federal Taxes >> Deductions & Credits >> Your Home >> Mortgage Interest, Refinancing, and Insurance. Regardless of how you entered it already, if at all, as you review these sections, it will become apparent how to correct the entry.
