topic Deducting Rental Property Mortgage interest from a Multi Property Blanket Loan in Investors & landlords

Deducting Rental Property Mortgage interest from a Multi Property Blanket Loan

HeartlandDevelopment — Mon, 09 Mar 2026 09:17:38 GMT

Hello,

I have one blanket loan on 4 single family rental homes. I have received one 1098 with the yearly mortgage interest paid.

The rental property mortgage interest is deductible as an expense and the most logical path seems to be to divide the interest in 4 and allocate 25% equally to each home. However, I worry that the IRS audit algorithm will flag for audit because I will have interest amounts that do not match a 1098.

Should I instead allocate all interest to one of the properties for less risk of audit?

Re: Deducting Rental Property Mortgage interest from a Multi Property Blanket Loan

MinhT1 — Wed, 02 Mar 2022 21:00:36 GMT

If you report the rentals separately by units, then the mortgage interest should be divided among the units, as long as the total interest claimed does not exceed the interest reported on form 1098.

Re: Deducting Rental Property Mortgage interest from a Multi Property Blanket Loan

HeartlandDevelopment — Wed, 02 Mar 2022 22:46:09 GMT

OK, Thank you for the quick response @MinhT1