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Level 2
posted Mar 15, 2020 12:08:38 PM

Are main residence taxes and interest deductible when I am also renting out my previous residence and deducting prop taxes on that?

My previous residence is now being rented out.  I lived in that house for the last 60 years.  That residence is paid off.  I've been told that I cannot deduct my new home's mortgage interest nor property taxes because of me having that rental property.  I guess I should also note that the rental property is located on my farm land.  I still operate the farm land.  The home on the farm land is rented out to tenants.  They only rent the home.  My new residence is completely separate from the farm land.  Why am I being told that my main residence interest and taxes cannot be deducted??

0 3 678
3 Replies
Expert Alumni
Mar 15, 2020 12:24:27 PM

You can deduct the mortgage interest and property tax on your primary residence. The fact that you now have a rental property has no bearing on the tax destructibility of those items.  As for your now rental property, be sure you have set it up as rental in TurboTax so that you are properly deducting the expenses and depreciation on Schedule E.

Level 2
Mar 15, 2020 1:27:22 PM

So the fact that this rental house is located on my farm land that I currently operate on has no bearing on whether or not I should be able to deduct interest and property taxes on my new residence?

Expert Alumni
Mar 15, 2020 1:39:41 PM

Correct, it has no bearing.