Split Mortgage interest on 1098 due to rental property conversion, do I check the box "the interest amount is different from what on my 1098"

[Critter]

No worksheets get transmitted ... only forms, schedules & statements.  

And unless the accountant went and purposely attached the worksheet to the return it would not have been sent from a professional program either ... however he may have given you a copy of all the worksheets with the return in your packet.

To see what gets sent look in the PRINT Center and choose the first option ... the return only.

[speedway121]

@TaxGuyBill I just manually reviewed the "Employee Home Office Worksheet". I am specifically looking at lines 25 vs line 34.

This is for the primary residence Home office, the house which I own and had a home office in for 3 months out of 12 months.

Line 25= Takes into account all the deductible mortgage interest, and real estate taxes.  ($25,000) (Note this includes the TOTAL mortgage interest and Real Estate taxes paid, TT did not prorate this).

Line 34=Insurance, Rent, Repairs, Utilities, Other expenses. A Percentage of this total. No RENT. ($300)
And eventually line 35 ("Take the smaller of line 25 or line 34")

So I guess I am getting pretty screwed here becauseI am required to take Line 34 (the $300) vs the $25000 as the allowable operating expenses.


You mentioned earlier that "Mortgage Interest and Real Estate Taxes basically skip Form 2106, and go directly on Schedule A.  So you can just enter the $2500 as a rental expense, and $7500 as an Itemized deduction on Schedule A"

Can I just consider it a rental expense which culminates on Line 34? How much do I put on there?

[TaxGuyBill]

I'm not looking that the form right now, but here are my thoughts:

As I said before, Mortgage Interest and Real Estate Taxes basically skip Form 2106.  That amount goes directly to Schedule A.

So yes, your Home Office expenses on Form 2106 are composed of the expenses OTHER than Mortgage Interest and Real Estate Taxes because the Mortgage Interest and Real Estate taxes have already been used.

[speedway121]

@TaxGuyBill Does this mean I can put in a number for the rental expense? You said above to put in a 2500 rental expense, but how do I go about calculating the exact number. This is for the primary residence which I am taking the mortgage interest deduction on SCH A.

[TaxGuyBill]

If it was rented exactly 25% of the year (3 months out of 12 months), enter 25% as a rental expense, and the other 75% as a personal expense.  If it was rented a different percentage of the year, use that percentage.