If I have rental property, why do i have to deduct my mortgage interest on schedule A for the unit in which I live and then deduct the tennants portion of the mortgage interest on Schedule E?
Why not put it all on Schedule A? Is there a different calculation used between A and E?
This is a tough question I know. Thanks for any insight!
2007-02-20 07:48:53 · 5 answers · asked by KL 1 in Business & Finance ➔ Taxes ➔ United States
The mortgage deducted on schedule A is for your personal residence which is tax deductible whereas interest paid on investment property is not and will be shown as an expense on schedule E........schedule E is where you report other income not W-2 or 1099...e.g. rental income, passthrough business income and so forth...hope that helps!!!
2007-02-20 07:53:12 · answer #1 · answered by boston857 5 · 1⤊ 0⤋
Schedule A is itimized deductions like the interst you pay on a home you live in (not rent out).
However a Schedule E is for property you rent out either commercial or residential. The interest you pay on those houses are deducted on that form as a deduction along with any other expenses that can be used and money that is earned agains that property like rent paid from tenant.
In easy terms:
Schedule A = Personal
Schedule B = Rentals
2007-02-20 07:53:38 · answer #2 · answered by ~Just A Girl~ 3 · 0⤊ 0⤋
The reason is that it seperates the personal portion of the mortgage from the business(rental) portion. That way you will get an accurate picture of your overall expenses for the rental property, which lowers your gain on renting out the property which lowers your tax bill.
2007-02-20 07:55:22 · answer #3 · answered by R Worth 4 · 0⤊ 0⤋
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2016-11-24 20:37:32 · answer #4 · answered by ? 4 · 0⤊ 0⤋
As you yourself have agreed that your question is a tough one, my answer to your question would be a request to consult an Tax Expert.
2007-02-20 07:53:49 · answer #5 · answered by cabridog 4 · 0⤊ 0⤋