Main Home and Rental Income

Zordon — Sat, 05 Feb 2022 08:14:58 GMT

We lived in our home for about half of last year then rented it out for the other half. When I go through the prompts in TurboTax, it ends up showing we are deducting more than the total mortgage interest paid and less than the total real estate taxes paid. That's not right, is it? What are the "rules" on deducting mortgage interest on a rental that was also your primary home during a given year?

Re: Main Home and Rental Income

AnnetteB6 — Sun, 06 Feb 2022 16:30:05 GMT

No, that's not right.

If you used the home as your residence for about half the year and as a rental property for the other half of the year, then you should see about half of the mortgage interest and property taxes reported on Schedule A Itemized Deductions (representing the part of the year that the home was used personally) and about half reported on Schedule E Rental Income and Expenses (representing the part of the year that the home was a rental property). The exact amounts will depend on when the property was converted to a rental, but the amounts deducted on each form will be prorated based on time.

As you go through your return, you should come to the Rental Income and Expenses section first. When you enter the mortgage interest and property tax amount, pay close attention to the information on the screen and whether or not you want TurboTax to automatically transfer the personal amount to Schedule A.

Then, when you are entering mortgage interest and property taxes in the Deductions and Credits section, pay close attention to see what amount is already being reported on Schedule A that was transferred over from the rentals section.

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Main Home and Rental Income

Re: Main Home and Rental Income