tax newbie here. first time rental property owner.
I have all my repairs and expenses and utilities from my second apartment in my shceule e. Should i be claiming the mortgage interest and taxes just on my 1098 as they are listed? or should i be using a percentage. for example. its a 4 bedroom building. i have a 3 bedroom apartment that i live in and rent out a 1 bedroom apartment on the property that is about 25% of the square footage of the liveable space. Should i be claiming 25% of the mortgage interest and 25% of the taxes on my schedule E and the other 75% for personal use on my 1098? or should i just be filling out my 1098 as it listed in the boxes?
that is my basic understanding of it but i also am afraid to altar the digits on my 1098 if they sent it to me one way, i should be entering that info how it is listed right? but maybe it is different because it is a rental property that i live in.
Any help is appreciated. thank you.
1098 form and schedule e question. Im attempting to claim my mortgage and interest on my rental property. i live in one apartment and rent out the other. how should i be claiming this?
byu/chazt3r intax
Posted by chazt3r
1 Comment
Yes, you should be bifurcating your mortgage interest and real estate taxes between the primary unit and the rental – along with any other undivided expenses.
The IRS stands by a reasonable division – sq footage is common, or by number of private rooms if it is a share house. Just make sure you are considering the mortgage interest deduction limits if the mortgage exceeds $750,000
The IRS is not going to take a close look at your interest and RE Tax deductions unless they exceed the amounts reported on the 1098