How do I deduct mortgage interest primary residences switched during the year

[D7knight2]

Hi,

I have a house since 2021 with mortgage interest on a 700k loan .

In July 2024 I downsized to a condo and rented out the house . The mortgage on the condo is ~500k

Can I deduct the mortgage interest for the house from Jan to July when it was a primary residence and the condo from July to Dec? Or would I need to choose one 1098t form to deduct for schedule A and not both? Can I deduct whatever interest I don't deduct for the rental from July - December to schedule E?

Is there an easy way to do all of this in Turbotax 

[M-MTax · Accepted solution]

You can deduct mortgage interest on Sch A for your house from Jan to July and then on your condo from July through December. 

The interest paid on your house....now a rental....is deductible on Sch E from the date you started renting it.

[zomboo]

Although you will be able to deduct the mortgage interest for the house from Jan to July and the condo from July to Dec on schedule A, it will be limited to approximately $750K / ($700K + $500K) = 62.5% of the interest paid during this time. The interest paid on the house after converting to a rental is deductible as a rental expense on schedule E and not subject to this limitation.