How do I enter mortgage points on owner occupied duplex?

[bt2009bt]

I purchased the property last year (first year filing for it). I live in one half and rent out the other. Can I claim the full amount because it is my primary residence or do I have to deduct it over the life of the loan? Would it make more sense to not put the mortgage down under the rental property section and instead claim the full mortgage under the personal deductions part later on?

[MargaretL]

Yes, you can claim the points in full on a purchased home (your duplex). Deducting over the life of the loan refers to refinancing points not used for purchase or home improvement. Just select the box I bought or improved my main home with this loan in 2016, when going through the mortgage interest data entry in Deductions and Credits.

As to the half rental property... you should divide your expenses between rental and duplex.  Half of mortgage interest, real estate taxes, points, mortgage insurance is entered as your rental expense, the other half under personal deductions and credits.

Other expenses, such us utilities, HOA, hazard insurance etc. should be also divided in half.  The rental half is your rental expense, the other half is  not deductible at all and not entered anywhere, as these listed expenses do not qualify for personal deductions. 

[bjf540]

Would the points paid be split between the unit you live in and the unit that is rented out? If so, can you include the value of the points as interest paid on the schedule e?

[DaveF1006]

Claiming points on a rental property is much different than on a personal residence.You would need to enter points in your Schedule E Points in the same area of interview where you track the depreciation of your rental property, You need to go to the Asset/Depreciation topic and enter your loan fees. They are categorized by the IRS as an "Amortizable Intangible". You will enter code section 163: Loan Fees as the method to amortize these expenses. Usually these are amortized over the life of the loan.

Please review this Turbo Tax document for further details on reporting points.

[bjf540]

What if the duplex is purchased as a primary residence and the 2nd unit was rented out after purchase, would the total amount of these points be deducted from my schedule A or still split between the rental unit and my personal unit proportionately?

[JohnB5677]

Yes, the points as well as the other appropriate expense should be split.  Often the split is done based on the square footage of each unit.