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lllbby
Level 1

We rented a house in the 1st half last year followed by remodel in the 2nd half. For the remodel time, can we deduct property tax/interest as rental loss or second home?

 
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AnnetteB6
Expert Alumni

We rented a house in the 1st half last year followed by remodel in the 2nd half. For the remodel time, can we deduct property tax/interest as rental loss or second home?

As long as the rental property was still advertised and available to rent during the time it was being remodeled, then it was still considered a rental property and you can deduct the property tax and mortgage interest as a rental expense. 

 

Otherwise, the rental property could be considered to be converted to personal use during the second half of the year and then you can deduct the property tax and mortgage interest as part of Schedule A itemized deductions as long as the property can be considered your second home.

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AnnetteB6
Expert Alumni

We rented a house in the 1st half last year followed by remodel in the 2nd half. For the remodel time, can we deduct property tax/interest as rental loss or second home?

As long as the rental property was still advertised and available to rent during the time it was being remodeled, then it was still considered a rental property and you can deduct the property tax and mortgage interest as a rental expense. 

 

Otherwise, the rental property could be considered to be converted to personal use during the second half of the year and then you can deduct the property tax and mortgage interest as part of Schedule A itemized deductions as long as the property can be considered your second home.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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